Archive | June 2015

June 25 2015

MBS are down -3/32 (FNMA 30-yr 3.5 at 102.25), around 2/32 higher than yesterday at this time. Favorable repricing took place yesterday.

This morning, the May core PCE price index increased 0.1% from April, matching expectations, and it was just 1.2% higher than a year ago. This is the Fed’s preferred measure of inflation, and Fed officials have stated that they would like to see core inflation rise to 2.0%. Personal Income also matched expectations with an increase of 0.5% from April. Weekly Jobless Claims rose to 271K, close to the consensus of 275K. There was little reaction to today’s data. The Dow is up 10 points. No more economic data will be released today. The results from the 7-yr Treasury auction will come out around 1:00 et.

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Market update 6/23/2015

MBS are down -7/32 (FNMA 30-yr 3.5 at 102.21), around 24/32 lower than yesterday at this time.
Unfavorable repricing took place yesterday.

Increased optimism about a Greek deal and hawkish comments from a Fed official outweighed weaker than expected U.S. economic data this morning. Today, the Fed’s Powell expressed support for a federal funds rate hike in September and a second rate hike later this year. This is a faster pace than most investors expect. May Durable Orders fell 1.8% from April, well below the consensus for a decline of 0.5%, and the April data was revised lower. The Dow is up 50 points. New Home Sales will be released at 10:00 et. The results from the 2-yr Treasury auction will come out around 1:00 et.

June 19 2015 Market Update

MBS are up +6/32 (FNMA 30-yr 3.5 at 103.13), around 8/32 higher than yesterday at this time. Some favorable and some favorable repricing was seen yesterday.

Concerns about Greece have helped MBS again this morning. An emergency meeting has been scheduled for Monday, but time is running out to reach a bailout agreement before Greek debt repayments are due on June 30. The Dow is down 50 points. No economic data will be released today.

MArket update 6/18/2015

MBS are up +2/32 (FNMA 30-yr 3.5 at 103.05), around 8/32 higher than yesterday at this time. First unfavorable and later favorable repricing took place yesterday. Early investors may have priced at a range of levels.

This morning, May CPI increased 0.4% from April, below the consensus for an increase of 0.5%. CPI was unchanged from one year ago, as the decline in oil prices offset other increases. Core CPI, which excludes food and energy, rose 0.1% from April, below the consensus for an increase of 0.2%. Core CPI was 1.7% higher than one year ago, down from 1.8% last month. Separately, weekly Jobless Claims declined to 267K, a little below the consensus of 275K. The Dow is up 125 points. Philly Fed and Leading Indicators will be released at 10:00 et.

2 WORDS!!! Go BLACKHAWKS

Finally the pullback I was expecting:

MBS are up +6/32 (FNMA 30-yr 3.5 at 102.31), around 3/32 higher than Friday at this time. First favorable and later unfavorable repricing  was seen Friday. Early investors may have priced at a range of levels.

A breakdown in the Greece bailout talks and weaker than expected U.S. economic data has helped MBS this morning. Negotiations between Greek and eurozone officials stalled over the weekend, increasing the risk that Greek will default on its debt. In the U.S., May Industrial Production decreased 0.2% from April, below the consensus for an increase of 0.3%. The Empire State regional manufacturing index fell to 2.0, below the consensus of 6.0. The Dow is down 200 points. NAHB Housing will be released at 10:00 et.

MARKET UPDATE 6/12/2015

MBS are down -4/32 (FNMA 30-yr 3.5 at 102.23), around 5/32 below morning levels, 11/32 below midday highs, and near the low for the day. First favorable and later unfavorable repricing was seen. Without any major news, MBS rallied early and then declined sharply during the second half of the session. Consumer Sentiment rose to 94.6, above the consensus of 91.0. The Dow is down 140 points. For the week, MBS rose about 4/32.

Next week, the biggest event will be Wednesday’s Fed meeting. Investors will be looking for hints about the timing of the first federal funds rate hike. Before that, Industrial Production, an important indicator of economic activity, will be released on Monday. Housing Starts will come out on Tuesday. The Consumer Price Index (CPI), the most closely watched monthly inflation report, will come out on Thursday. CPI looks at the price change for those finished goods which are sold to consumers. News about Greece likely will have an influence on U.S. mortgage rates as well.

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Whats moving the Market 6/11/2015

MBS are up +8/32 (FNMA 30-yr 3.5 at 102.14), around 5/32 higher than yesterday at this time. Both favorable and unfavorable repricing was seen yesterday. Early investors may have priced at a range of levels.

A couple of factors helped MBS prices to climb higher this morning. Bond yields in Europe declined today, pulling bond yields around the world lower as well. In addition, investors in the U.S. were relieved that the Retail Sales data (see below) did not surpass the consensus by a wide margin. The Dow is up 50 points. No more economic data will be released today. The results from the 30-yr Treasury auction will come out around 1:00 et.

Following stronger than expected recent labor market data, today’s Retail Sales report came in pretty close to expectations. May retail sales increased 1.2% from April, slightly below the consensus of 1.3%, and they were 2.7% higher than a year ago. Retail sales ex-auto rose 1.0%, above the consensus of 0.8%. The strong results over the past three months suggest that the weakness in spending seen over the winter was due to temporary factors such as bad weather and port strikes. Separately, weekly Jobless Claims rose slightly to 279K, above the consensus of 275K. May Import Prices rose more than expected.

What a week 6/5/2015

MBS are down -17/32 (FNMA 30-yr 3.5 at 102.29), close to most morning levels. Some favorable and some unfavorable repricing took place. Stronger than expected Employment data hurt MBS. The Dow is down 50 points. For the week, MBS fell about 1 and 18/32.

Next week, the JOLTS report, measuring job openings and labor turnover rates, will come out on Tuesday. Retail Sales, which account for roughly 70% of economic activity, will be released on Thursday. The Producer Price Index (PPI), which focuses on the increase in prices of “intermediate” goods and services used by companies to produce finished products, will come out on Friday. There will be Treasury auctions on Tuesday, Wednesday, and Thursday. Investors will be keeping an eye on the negotiations between Greek and eurozone officials as well.

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GREAT JOBS report = JUMP IN RATES

MBS are down -16/32 (FNMA 30-yr 3.5 at 102.29), around 12/32 lower than yesterday at this time. Favorable repricing took place yesterday. Early investors may have priced at a range of levels.

MBS fell swiftly this morning after the release of a stronger than expected Employment report. Against a consensus forecast of 225K, the economy added 280K jobs in May. Upward revisions to prior months added another 32K. The Unemployment Rate increased from 5.4% to 5.5%, above the consensus for a flat reading of 5.4%. The increase was due to an unexpectedly large number of people entering the labor force in May, a sign of strength. Average Hourly Earnings rose 0.3%, above the consensus of 0.2%, and were 2.3% higher than a year ago. The strength in job gains and wage growth was negative for MBS. The Dow is down 50 points. No more economic data will be released today.

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Market Update

MBS are up +5/32 (FNMA 30-yr 3.5 at 103.09), around 1/32 lower than yesterday at this time. Unfavorable repricing took place yesterday. Early investors may have priced at lower levels.

MBS have recovered some of yesterday’s losses this morning. Weekly Jobless Claims declined to 276K, close to the consensus of 275K. Continuing claims dropped to the lowest level since 2000. First quarter Productivity came in close to expectations. The Dow is down 50 points. No more economic data will be released today.

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