Monday

March 27th, 2017

Commentary at the close: MBS closed higher, with spreads tighter vs Treasuries, as markets reacted to the inability of Republican leadership to repeal and replace Obamacare in risk off fashion. The Fannie Mae 30-yr 3.5% coupon gained 25bp to end at 102.28, above both R1 and R2 resistance levels.  See chart below

Risk off was the trade today as investors rushed into the Bond markets pushing prices higher and yields lower. Stocks fell after the AHCA was pulled on Friday due to lack of votes.. There were no economic reports released today. Stocks traded sharply lower in early trading but did manage to cut some losses by the close of trading while the NASDAQ closed positive. The Dow lost 45.74 points to 20,550.98, the S&P 500 fell by 2.39 points to 2,341.59, while the NASDAQ closed up 11.63 points to end the session at 5,840.37. WTI oil was last seen at $47.81/barrel, near unchanged. 10-yr yield 2.37%. Tomorrow's economic data is limited to March Consumer Confidence. The Treasury will sell $34B 5-yr Notes, results at 1:00 p.m. ET. 

 

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.

 

 

3:08 PM After being down nearly 200 points earlier in the session, the Dow closes down by 43 points for its 8th straight losing session.
2:02 PM MBS trade in a tight range holding gains as the afternoon drags on.
1:23 PM Fed's Evans also says he doubts there will be enough economic improvement in the U.S. to warrant a rate hike by the May FOMC meeting.
1:15 PM Fed's Evans says inflation looks well on the way to reaching objective.
1:13 PM The $26B 2-yr Note auction garners a "B" rating.
12:58 PM At midday, MBS holding solid gains. Stocks lower. off worst levels.
12:38 PM Bond players await the 1:00 p.m. ET release today's $26B 2-yr Note offering.
11:14 AM MBS now near session lows as Stocks cut some losses. Be on guard for further weakness in MBS.

10:32 AM  3.5% Fannie Mae 30-yr coupon up  28  bp at a price of 102.31 down 6 bp when rates were set today at 10:00 am Open 102.34 High 102.38 Low 102.28

10:05 AM Stocks off worst levels but still well into negative territory.
9:56 AM “Doves” are Fed members that are inclined to maintain low interest rates to spur hiring. “Hawks” are Fed members that are inclined to raise interest rates to combat inflation.
9:30 AM Stocks open sharply lower. Dow -173 points.
9:23 AM Trulia reports that housing inventory declines to all-new low, eighth consecutive quarterly decrease.
8:49 AM The benchmark Fannie Me 30-yr 3.5% coupon opens up above resistance two (R2-102.19).
8:36 AM U.S. dollar index 98.72, -0.71, lowest since early November.
8:33 AM WTI oil $47.47/barrel, -$0.50.
8:16 AM There are no economic reports due for release today but the rest of the week's calendar features housing, manufacturing, GDP, Consumer Confidence and Sentiment, Personal Income & Spending and Core PCE.
8:13 AM The Treasury will sell a total of $88B in T Notes this week beginning with today's offering of $26B 2-yr Notes, results at 1:00 p.m. ET.
8:10 AM MBS open higher to begin the week on weak Stock futures.
8:05 AM The 10-yr T Note yield declines to 2.35% from the recent high of 2.62% on March 13.
8:00 AM S&P futures lower as global investors avoid risky assets after the failure of the U.S. Congress to pass a replacement to Obamacare.

Johnmarbury.com has attempted to verify the information contained on this post.  However any aspect of such may change without notice.  Johnmarbury.com does not provide investment advice and does not represent that any of the information or related analysis is accurate or complete at any time. On October 5th we started posting our rates and leaving them on the site for you to refer back to. This will allow  you see where actual rates have been along with the news that caused the fluctuations on the rate sheet.  I ask that you forgive my spelling and grammatical mistakes. This is due writing skills that are lacking and the need to communicate quickly.  Most of the information posted on this blog along with the charts and indexes are available all during the day to the subscrbers of www.themortgagemarketguide.com  The cost of subscription is very reasonable.

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