February 6th, 2017
Commentary at the Close: With the close above resistance one (R1) at the 50-day Moving Average (102.19) sends a bullish tone, but we need to see a second consecutive close above that level to break out the party hats.
MBS started the day higher, then quickly gave up those gains, only to rally and close higher for the session as risk off was the key. There were no economic reports released today. The Fannie Mae 30-yr 3.5% coupon closed at 102.41, +25bp. Stocks ended lower. The Dow lost 19.04 points to 20,052.42, the S&P 500 fell by 4.86 points to 2,292.56, while the Nasdaq was down 3.21 points to 5,663.55. WTI oil closed at $53.01, -$0.82. 10-yr yield 2.41%. There are no scheduled major economic reports tomorrow. The Treasury will sell $24B 3-yr Notes, results at 1:00 p.m. ET.
9:12 AM 3.5% Fannie Mae 30-yr coupon up 18 bp at a price of 102.34 up 9bp when rates were set Friday at 10:00 am Open 102.28 High 102.44 Low 102.28 We are currently trading above the 25 day moving average (Green Line) and the 50 day moving average (Black line and R1).
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.
3:48 PM Bond prices rise, yields lower as investors pare risk assets.
3:15 PM MBS holding gains as they trade in a tight range this afternoon.
1:20 PM Just past midday, MBS back at session highs, Stocks back in negative territory.
11:28 AM Fed buying boosts MBS prices off the session lows.
10:39 AM MBS able to bounce off lows.
10:18 AM MBS could get a boost around 11:15 a.m. ET when the New York Fed will purchase up to $1.625B in 30-yr Fannie/Freddie 3s and 3.5s.
10:13 AM The Dow turns positive.
10:12 AM The Fannie Mae 30-yr 3.5% coupon is now at session lows.
9:42 AM Stocks cutting into some losses, MBS off highs.
9:41 AM U.S. dollar index 100.07, +0.23.
9:31 AM As expected, Stocks open lower amid political uncertainty.
8:40 AM The New York Fed will be purchasing up to $1.625B today in Fannie/Freddie 3s and 3.5s beginning at 11:15 a.m. ET.
8:31 AM WTI oil $53.67/barrel, near unchanged.
8:26 AM The New England Patriots and quarterback Tom Brady orchestrated the greatest comeback in Super Bowl history as they defeated the Atlanta Falcons 34-28 in overtime.
8:25 AM 10-yr T Note yield falls to 2.41% vs Friday's close of 2.49%.
8:24 AM This week, the Treasury will sell $24B 3-yr Notes on Tuesday, $23B 10-yr Notes on Wednesday and $15B 30-yr Bonds on Thursday.
8:19 AM There are no economic reports due for release today and the rest of the week is extremely light with just jobless claims on Thursday and Consumer Sentiment on Friday.
8:15 AM The strong payrolls report for January was accompanied by tepid wage growth, which could keep the Fed on a gradual path of interest rate hikes.
8:08 AM MBS open higher as S&P futures decline as equity investors look for the next catalyst to push prices higher.
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