January 26th, 2017
Commentary end of the day: MBS were volatile today but wound up closing at session highs, near unchanged after opening below support one (101.94), falling through support two (S2) only to close just below support one. Today's weaker-than-expected New Home Sales numbers and the well received 7-yr auction fueled today's rebound. The Fannie Mae 30-yr 3.5% coupon closed near unchanged at 101.84, after being down 47bp early in the session. Stocks ended mixed, but the Dow closed at a fresh record high of 20,100.91, +32.40 points. The S&P 500 closed near unchanged at 2,296.68 as did the Nasdaq at 5,655.17. WTI oil closed at $53.78/barrel, +$1.03. 10-yr T Note yield closed at 2.50%. Tomorrow's economic data includes GDP, Durable Orders and Consumer Sentiment.
Commentary 2:25 PM: We will not call it a comeback in the commentary, but we will call it moving in the right direction. Stay tuned we will be posting information at the close today. As you can see below that we are trading 50 bp above the low today. If this continues we could see better rate in the near future. You can call me the master of the obvious.
3.5% Fannie Mae 30-yr coupon up 3bp at a price of 101.88 up 16bp when rates were set today at 10:00 am Open 101.62 High 101.88 Low 101.38
What Is Going On With Interest Rates? #wigowir
Below is the news when it happened and the market’s reaction. For a full view of the day start at the bottom and work your way up. If want to know what just happened start at the top. All Times are Eastern Standard Time. When the price of Mortgage Backed Securities (MBS) goes down rates go up, and when the price goes up rates come down. Remember in the bond market Bad News is Good News and Good News is Bad news.
2:12 PM Software giant Microsoft reports after the closing bell on Wall Street today.
1:55 PM After opening at 101.62 and subsequently falling to 101.38, the Fannie Mae 30-yr 3.5% coupon trades higher to 101.84.
1:10 PM The $28B 7-yr Note auction garners an "A" rating. With this week's auctions behind us, MBS able to recover the day's losses. We will look to switch to a floating stance.
1:01 PM At midday, MBS off lows, S&P turns negative. 10-yr yield 2.52% after hitting 2.56% earlier in the session.
12:33 PM Big comeback for MBS. Next up, the results from today's $28B 7-yr Note auction, results at 1:00 p.m. ET.
11:40 AM MBS able to recover from early lows, though still in negative territory.
10:39 AM We issued an Alert to Lock yesterday, we advised locking in last night's Closing Technical Signal and we advised locking in this morning's Daily Market Update.
10:38 AM MBS continue to push lower.
10:08 AM Following the report on higher mortgage rates from the MBA, Freddie Mac reports that the 30-yr fixed conventional mortgage rate, $424K or less, rose to 4.19% from 4.09% this week with 0.4 in points and fees.
10:04 AM December New Home Sales -10.4% from November to an annual rate of 536K vs the 589K expected. Higher mortgage rate and higher prices the culprits.
9:36 AM The Dow opens above 20,000 for the second straight day.
9:34 AM Stocks modestly higher soon after the opening bell on Wall Street.
9:03 AM Dow component Caterpillar beats on earnings per share, misses on revenues, cuts outlook.
8:48 AM MBS are now above the opening lows.
8:45 AM The 3.5% Fannie Mae 30-yr coupon closed below support one (S1) at 101.94 yesterday and opened below that level this morning. The next level of support can be seen at 101.44.
8:31 AM Weekly Initial Jobless Claims +22K to 259K, above the 246K expected.
8:24 AM WTI oil $53.09/barrel, +$0.33.
8:24 AM The Treasury will sell $28B 7-yr Notes today, results at 1:00 p.m. ET, and comes after tepid demand for yesterday's 5-yr offering.
8:21 AM Weekly Initial Jobless Claims (8:30) and New Home Sales (10).
8:12 AM S&P futures flat after the risk on trade sent the Dow to the 20,000 mark for the first time in its 131-year history yesterday closing at 20,068.
8:10 AM As expected, MBS open lower.
8:10 AM U.S. dollar index 100.40, +0.38.
8:03 AM Global yields press higher ... 10-yr U.S. T Note yield 2.54% after yesterday's close of 2.52%, highest since December 28.
8:01 AM MBS look top open lower after global Stock markets edged higher on positive economic data
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