Archive | September 2015

Mid Day Update 9/30/2015

MBS are up +4/32 (FNMA 30-yr 3.5 at 104.12), around 6/32 above morning levels, and near the high for the day. Some favorable repricing took place. A weaker than expected reading for eurozone inflation caused increased speculation that the ECB may extend its bond purchase program, which helped MBS. Today’s U.S. economic data had little impact. The Dow is up 235 points.Tomorrow, Jobless Claims, ISM Manufacturing, and Construction Spending will be released.

Market Update 9/29/2015

MBS are up +6/32 (FNMA 30-yr 3.5 at 104.08), around 5/32 above morning levels, and near the high for the day. Favorable repricing took place. MBS prices drifted higher today and now are at their best level since early June. Consumer Confidence rose to 103.0, well above the consensus of 97.0, and the second highest reading since 2007. The Dow is up 50 points.Tomorrow, the ADP Employment Change and Chicago PMI will be released.

Mid Day Update 928/2015

MBS are up +5/32 (FNMA 30-yr 3.5 at 104.00), around 3/32 above morning levels, and near the high for the day. Favorable repricing took place. A decline in stocks lifted MBS. The Dow is down 310 points. Tomorrow, Consumer Confidence will be released at 10:00 et.

August Pending Home Sales dropped 1.4% from July, below the consensus for an increase of 0.5%. They still were 6% higher than a year ago.

Market update 9/28/2015

MBS are up +2/32 (FNMA 30-yr 3.5 at 103.29), around 2/32 higher than Friday at this time.

This morning, the August Core PCE price index rose 0.1% from July, matching the consensus, and it was just 1.3% higher than a year ago. This is well below the Fed’s target level of 2.0%. Personal Income increased a little more than expected. There was little reaction to the data. The Dow is down 150 points. Pending Home Sales will be released at 10:00 et.

Market Update 9/25/2015

MBS are down -3/32 (FNMA 30-yr 3.5 at 103.27), around 9/32 lower than yesterday at this time. Some unfavorable repricing was seen yesterday.

In a speech last night, Fed Chair Yellen said that she expects that a rate hike will be appropriate before the end of the year. She also reassured investors that the U.S. economy is strong enough to handle a rate hike. In response, global stock markets have rallied, which has hurt MBS. The Dow is up 150 points. Consumer Sentiment will be released at 10:00 et.

The third estimate for second quarter GDP was an upward revision from 3.7% to 3.9%, which was above the consensus of 3.7%. Early estimates for third quarter GDP are for growth around 2.0% to 2.5%.

Market Update 9/24/2015

MBS are up +4/32 (FNMA 30-yr 3.5 at 104.04), around 4/32 higher than yesterday at this time.

A decline in stocks has lifted MBS this morning. Today’s early economic data (see below) had little impact. The Dow is down 200 points. New Home Sales will be released at 10:00 et. The results from the 7-yr Treasury auction will come out around 1:00 et. Fed Chair Yellen will be speaking at 5:00 et.

After rising 1.9% last month, August Durable Orders declined 2.0% from July, which was close to expectations. Excluding volatile transportation orders, durable orders fell a little short of the consensus. Weekly Jobless Claims rose to 267K, which was a little lower than expected.

TGIF 9/18/2015

MBS are up +4/32 (FNMA 30-yr 3.5 at 104.01), around 23/32 higher than yesterday at this time. Favorable repricing took place yesterday.

A decline in stocks has lifted MBS this morning. The Dow is down 250 points. Leading Indicators will be released at 10:00 et.

FED NEWS!!!

MBS are up +19/32 (FNMA 30-yr 3.5 at 103.28), around 18/32 above morning levels, and near the high for the day. Favorable repricing took place. Heading into today’s Fed announcement, investors were split about whether the Fed would raise the federal funds rate for the first time since 2006. The Fed made no change in rates, however. According to Fed Chair Yellen, the Fed’s outlook for inflation has “softened slightly,” partly due to weaker global economic conditions. This was good news for MBS, which rallied this afternoon. Separately, the Philly Fed index dropped to -6.0, well below the consensus of 6.0, and the lowest level since February 2013. Stocks were volatile after the Fed announcement, and the Dow is down 60 points. Tomorrow, Leading Indicators will be released at 10:00 et.

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BIG DAY TODAY!!! FED minutes due out shortly

MBS are up +1/32 (FNMA 30-yr 3.5 at 103.10), around 3/32 higher than yesterday at this time. Some favorable repricing took place yesterday.

It has been a quiet morning for stocks and MBS ahead of the Fed announcement. The Dow is down 10 points. Philly Fed will be released at 10:00 et. The Fed announcement will come out around 2:00 et, and Fed Chair Yellen’s press conference will begin around 2:30 et. It’s likely to be a volatile afternoon.

Today’s early economic data had little impact. August Housing Starts fell 3% from July to an annual rate of 1.13M units, a little below the consensus of 1.16M. Building Permits came in close to expectations. Weekly Jobless Claims declined to 264K, below the consensus of 275K.

Morning Update 9/16/2015

MBS are up +2/32 (FNMA 30-yr 3.5 at 103.07), around 13/32 lower than yesterday at this time. Unfavorable repricing took place yesterday.

There was little reaction to the CPI data this morning. August CPI declined 0.1% from July, matching the consensus. CPI was 0.2% higher than one year ago. Core CPI, which excludes food and energy, rose 0.1%  from July, also matching the consensus. Core CPI was 1.8% higher than one year ago. This data did not provide much reason for investors to alter their outlook fortomorrow’s Fed announcement. The Dow is up 10 points. NAHB Housing will be released at 10:00 et. The Fed announcement will come out tomorrow around 2:00 et.