January 27th, 2017
Commentary at the close: MBS edged higher once again today after weaker-than-expected Q4 2016 GDP data, which rose by 1.9% after the 3.5% gain in Q3. The Fannie 30-yr 3.5% coupon gained 16bp to end the quiet trading day at 102. Closing at 102 and above 101.94 (S1 on the Chart below) may be good sign for better rates next week.
The Dow closed at 20,093.78, S&P at 2,294.69, both with minor losses. The Nasdaq was up slightly ending at 5,660.78. WTI oil closed at $53.17/barrel, -$0.61. 10-yr yield 2.48%. Next week's economic calendar is on the heavy side with the highlight being the January Jobs Report being released on Friday. In addition, the 2-day Fed meeting kicks off on Tuesday with the monetary policy statement being released on Wednesday at 2:00 p.m. ET. There is almost a zero percent chance of a hike to the Fed Funds Rate at the meeting. Have a great weekend!
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.
3:13 PM The January Job Report will be released next Friday. Non-farm Payrolls are expected at 170K.
12:51 PM At midday, MBS holding slim gains, Stocks slightly lower. 10-yr yield 2.49%.
11:59 AM Stocks trade modestly lower.
10:56 AM MBS trade in a tight range as the week comes to a close. Stocks modestly lower
9:01 AM MBS edging higher after the weaker-than-expected GDP data.
8:51 AM S&P futures modestly higher after the GDP data.
8:39 AM Consumer spending was 2.5% in the GDP report.
8:35 AM For 2016, the economy grew 1.9%, the worst showing since 2011 and down from 2.6% in 2015.
8:33 AM December Durable Orders -0.4% vs the 3.0% expected.
8:32 AM Q4 GDP 1.9% vs the 2.2% expected.
8:24 AM The 3.5% Fannie Mae 30-yr coupon opens below support at 101.94.
8:18 AM S&P futures near unchanged.
8:16 AM U.S. dollar index 100.69, +0.31.
8:14 AM 10-yr yield 2.51%.
8:14 AM WTI oil at $53.45/barrel, -$0.33.
8:13 AM MBS open near unchanged ahead of 4th Quarter GDP.
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