Archive | May 2015

Market is coming back: Revised GDP

MBS are up +4/32 (FNMA 30-yr 3.0 at 101.08), around 4/32 higher than yesterday at this time. Favorable repricing took place yesterday. Early investors may have priced at lower levels.

This morning, first quarter GDP was revised lower from 0.2% to -0.7%, which was very close to the consensus. The Chicago PMI regional manufacturing index missed badly to the downside, dropping to 46.2, far below the consensus of 53.0. The Dow is down 50 points. Consumer Sentiment will be released at 10:00 et.

REMEMBER  when this chart goes          “UP”    RATES    go “DOWN”

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Market Update 5/28/2015

MBS are down -1/32 (FNMA 30-yr 3.0 at 101.04), around 3/32 higher than yesterday at this time. Favorable repricing took place yesterday.

This morning, weekly Jobless Claims rose to 282K, a little above the consensus of 270K. The Dow is down 50 points. Pending Home Sales will be released at 10:00 et. The results from the 5-yr Treasury auction will come out around 1:00 et.

Market NEWS 5/27/2015

MBS are up +2/32 (FNMA 30-yr 3.0 at 101.05), around 4/32 above morning levels, 12/32 above the lows, and near the high for the day. Some favorable repricing was seen. A report that Greece was close to a bailout deal caused MBS to decline this morning, as investors returned to riskier assets. MBS recovered their losses later in the session, however. Demand was close to average for the 5-yr Treasury auction. The Dow is up 125 points. Tomorrow, Jobless Claims and Pending Home Sales will be released. The results from the 7-yr Treasury auction will come out around 1:00 et.

5/26/2015 Market UPDATE

MBS are up +1/32 (FNMA 30-yr 3.0 at 100.25), around 2/32 lower than Friday at this time. Unfavorable repricing took placeFriday. Early investors may have priced at a range of levels.

This morning, April Durable Orders declined 0.5% from March, matching the consensus. Excluding volatile transportation orders, Durable Orders rose 0.5%, which was close to expectations. A component referred to as nondefense capital goods, which is an indicator of business investment, was stronger than expected. The Dow is down 125 points. New Home Sales and Consumer Confidence will be released at 10:00 et. The results from the 2-yr Treasury auction will come out around 1:00 et.

FED Meeting Report Day. Hang on we are in for a wild ride

MBS are up +4/32 (FNMA 30-yr 3.0 at 100.18), around 4/32 higher than yesterday at this time. Both favorable and unfavorable repricing was seen yesterday. Early investors may have priced at much higher levels.

MBS rose to a high of +9/32 this morning and then gave back some of the gains. Increased concern about a Greek debt default provided a boost to safer assets such as MBS. The Dow is down 25 points. The FOMC Minutes from the April 29 Fed meeting will be released at 2:00 et.

Market update 5/15/2015

MBS are up +7/32 (FNMA 30-yr 3.0 at 100.30), around 14/32 higher than yesterday at this time. Favorable repricing took place yesterday.

A volatile week looks set to end with a partial recovery in MBS prices. April Industrial Production declined 0.3%, below the consensus for a slight increase. The Empire State regional manufacturing index rose to 3.1, a little below the consensus of 5.0. The Dow is up 10 points. Consumer Sentiment will be released at 10:00 et.

Finally caught a break

Mortgage rates finally caught a break today.  This is quite a welcome development (indeed, yesterday’s commentary pointed out that no breaks were being caught!), but the magnitude of the improvement left something to be desired.  Still, we’ll take what we can get at the moment.  For most borrowers, today’s improvement will simply decrease the closing costs associated with the rates they were already being quoted.  For conventional 30yr fixed loans, the average lenders remains at 4.0% for top tier borrowers.

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Market Update 5/14/2015

MBS are up +8/32 (FNMA 30-yr 3.0 at 100.16), around 7/32 lower than yesterday at this time. Unfavorable repricing took place yesterday. Early investors may have priced at lower levels.

It has been another volatile morning. Weaker than expected PPI inflation data may have contributed to the gains for MBS. April PPI fell 0.4% from March, below the consensus for an increase of 0.2%, and it was 1.3% lower than a year ago. Core PPI, which excludes food and energy, decreased 0.2%, below the consensus for an increase of 0.1%. Core PPI was 0.8% higher than a year ago. Weekly Jobless Claims came in at 264K, below the consensus of 275K. The Dow is up 100 points. No more economic data will be released today. The results from the 30-yr Treasury auction will come out around 1:00 et.

Why are rating going up??

Treasury auctions and news out of Europe yesterday
caused an MBS sell off. Analysts are forecasting a
domestic mortgage rate hike as the Fed considers
raising Treasury rates sooner than anticipated.
Yesterday, corporations began issuing billions of
dollars in debt to secure lower interest rates. In turn,
this forced rates to rise even higher, and it is
forecasted that the same course of events will occur
today.