Did Trump say not to hike rates?

April 12th, 2017

At the close  3.5% Fannie Mae 30-yr coupon up 25 bp at a price of 102.91 up  28 bp when rates were set today at 10:00 am Open 102.62 High 102.97 Low 102.59 (Notice that we have brokent $102.72 on the chart above. Stay tuned in to see we can stay above this number)

Commentary at the close: MBS closed higher as the markets digested President Trump's comments in an interview with the Wall Street Journal talking down both interest rates and the U.S. dollar. No matter what side of the political spectrum you reside, you have to thank President Trump for single handedly pushing Bonds higher and yields to the lowest level in 2017. He said the US Dollar is too strong and he supports a low interest rate environment. He could have just said he doesn’t want the Fed to hike rates, because that only makes the Dollar stronger. This event pushed the 10-year yield down to 2.26% and beneath support at 2.30%. This could be very meaningful and could lead to even lower rates ahead … BUT, we must take into account that trading volume is light due to the holiday shortened week, so this move could be exaggerated. And we must see confirmation of this move higher tomorrow and Monday. For now, take into consideration what sparked this move and how quick this could be reversed … especially since it is taking place on a low volume trading day.


The aforementioned Bond friendly words from President Trump lifted prices late in the day, while Stocks closed lower on continued geopolitical headlines. There were no economic reports released today. The Bond closed at 102.91, +25bp. The Dow lost 59.44 points to 20,591.86, the S&P 500 fell by 8.85 points to 2,244.93, while the NASDAQ was down 30.61 points to end the session at 5,836.16. WTI oil closed at $53.11/barrel, down 29 cents. The 10-yr T Note yield 2.26%. Tomorrow's economic data includes Weekly Initial Jobless Claims, PPI and Consumer Sentiment. The Bond markets will close early tomorrow at 2:00 p.m. ET and both Stocks and Bonds will be closed on Friday for the Good Friday holiday.

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.

3:29 PM Trump says dollar getting too strong.
3:22 PM MBS edge higher after Trump's remarks.
3:19 PM President Trump undecided on re-nominating Fed Chair Yellen, prefers low interest rate policy.
2:31 PM MBS struggling in an otherwise unremarkable session.
1:54 PM Tillerson calls for improvement in US-Russia relations, which he says are at a low point.
1:49 PM Russia's Lavrov says talks with Tillerson were open, substantial. Stocks continue to cut losses.
1:46 PM Sec. of State Tillerson and Russia's Lavrov says have common goals to defeat ISIS.
1:42 PM Stocks cutting some losses.
1:40 PM MBS at session lows. Don't be surprised if you see an Alert To Lock forthcoming.
1:12 PM The $12B 30-yr Bond auction garners a "C-" rating.
12:16 PM MBS trade in a tight range today with little conviction to either side of the market being supported by lower Stock prices.
11:52 AM The 3.5% Fannie Mae 30-yr coupon bounces off the session low and trades back up to resistance at 102.72.
11:48 AM Mortgage points are fees paid to the lender at closing in exchange for a reduced interest rate.
11:44 AM Stocks push further into negative territory
9:51 AM The Fannie Mae 30-yr 3.5% coupon slips into negative territory.

9:44 AM  3.5% Fannie Mae 30-yr coupon up 0 bp at a price of 102.62 up 16 bp when rates were set yesterday at 10:00 am Open 102.62 High 102.75 Low 102.62

 

9:37 AM The S&P opens modestly lower.
9:15 AM Both Stocks and Bonds will be closed Friday in observance of Good Friday.
8:31 AM Just a reminder. The Bond markets will close early tomorrow at 2:00 p.m. ET.
8:30 AM Quarterly earnings from Citigroup, JPMorgan Chase and Wells Fargo will be released tomorrow.
8:29 AM 10-yr Note yield 2.29%. WTI oil $53.58/barrel, near unchanged.
8:23 AM Treasury Bills are short-term government securities with maturities ranging from a few days to 52 weeks. Bills are sold at a discount from their face value.
8:22 AM Treasury Notes are government securities that are issued with maturities of 2, 3, 5, 7, and 10 years and pay interest every six months.
8:22 AM Treasury Bonds pay interest every six months and mature in 30 years.
8:17 AM The last of this week's Treasury auctions will take place today with the 30-yr $12B Bond being offered. Results at 1:00 p.m. ET and comes after so-so demand for the 3- and 10-yr Notes on Monday and Tuesday.
8:10 AM The Fannie Mae 30-yr 3.5% coupon opens near resistance one (R1) at 102.72, a level it has only closed above 4 times this year. Check out the MMG Bond chart in a six-month view.
8:08 AM There are no economic reports due for release today.
8:04 AM S&P futures pointing towards a slightly lower open when the bell rings at 9:30 a.m. ET on Wall Street.
8:03 AM MBS look to open near unchanged as the safety trade begins to lose some of its luster.
8:01 AM The MBA also reports that the average loan size for purchase applications hit a survey high of $318,700.
7:59 AM The MBAs purchase index +2.9%, while the refinance index was unchanged.
7:58 AM The MBAs Market Composite Index, a measure of total mortgage loan application volumes, rose 1.5% in the latest week.
7:56 AM Fixed 30-yr jumbo rates were unchanged at 4.24%, while the FHA 30-yr fixed is at 4.14%.
7:55 AM The MBA reports that the 30-yr fixed conforming mortgage rate fell to 2017 lows at 4.28%.

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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