April 3rd, 2017
Commentary at the close: MBS began the new month and quarter higher as risk off was the trade early, but Stocks did manage to cut most of their losses by the close of trading. The strong ISM Index was shrugged off by Bond investors, while weak auto sales helped to boost Bond prices.
3.5% Fannie Mae 30-yr coupon up 38 bp at a price of 102.69 up 31 bp when rates were set today at 10:00 am Open 102.31 High 102.72 Low 102.31
Stocks traded well into positive territory until the last hour or so of the trading day as the Trump rally seems to be struggling at near record high levels. The Dow was down 150 points before closing at 20,650.21, -13.01 points. The S&P 500 fell by 3.88 points to 2,358.84, while the NASDAQ lost 17.05 points to end the session at 5,894.68. WTI oil closed at $50.24/barrel down $0.36. The 10-yr T Note yield declined to 2.32%. There are no major economic reports due for release tomorrow.
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.
|4:03 PM Stocks close well off their lows.|
|3:00 PM Stocks cutting into losses. The Dow was down nearly 150 points, now down 20.|
|1:35 PM Past midday, MBS holding gains, Stocks lower. 10-yr yield declines to 2.34%.|
|11:16 AM Construction spending in the U.S. rises to nearly an 11-year high.|
|11:11 AM Ten people killed and dozens injured when an explosion occurred in a subway train in St. Petersburg, Russia.|
|10:57 AM MBS at session highs as Stocks as Stocks fall into negative territory.|
|10:15 AM Stocks slip into negative territory.|
|10:02 AM The March ISM Index 57.2, just above the 57.0 expected.|
|9:35 AM The U.S. homeownership percentage was 63.4% in 2016, the lowest percentage nationwide since 1965.|
|9:31 AM The S&P opens slightly higher.|
|8:41 AM The Core PCE is the Fed's preferred inflation measure.|
|8:37 AM Fed officials are watching the Core PCE, which hit 1.8% year-over-year recently, matching the highest levels since 2012. The Fed's target range for Core PCE is 2%.|
|8:36 AM The Wall Street Journal reports the Federal Reserve could raise the benchmark Fed Funds Rate two more times in 2017 and then potentially pause later this year. The Fed would then consider to start winding down its balance sheet that consists of Mortgage Backed and Treasury securities.|
|8:30 AMT he New York Fed will purchase up to $1.275B in Fannie/Freddie 30-yr 3.5% and 4.0% coupons beginning at 2:00 p.m. ET|
|8:27 AM The 3.5% Fannie Mae 30-yr coupon continues in its sideways pattern near resistance one (R1/100-DMA) at 102.27.|
|8:24 AM There are no Treasury Note or Bond auctions this week.|
|8:21 AM Corporate earnings season kicks off this week.|
|8:19 AM S&P futures near unchanged.|
|8:17 AM The national ISM manufacturing index will be released at 10:00 a.m. ET.|
|8:16 AM U.S. dollar index 100.39, +0.17.|
|8:16 AM WTI oil $50.76/barrel, +$0.16.|
|8:15 AM 10-yr T Note yield 2.38%.|
|8:10 AM It is expected that U.S. employers added 180K workers last month.|
|8:09 AM MBS open near unchanged to begin the new month and quarter and ahead of Friday's Jobs Report for March.|
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