MBS are holding steady close to morning levels around +1/32. Pending Home Sales were a little weaker than expected.
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MBS are up +1/32 (FNMA 30-yr 3.5 at 103.11), around 3/32 higher than yesterday at this time.
This morning, third quarter GDP was revised higher to 2.1% from 1.5%, matching the consensus. The change was mostly due to inventory adjustments. Investors also are watching for a response to the downing of a Russian plane. The Dow is down 50 points. Consumer Confidence will be released at 10:00 et. The results from the 5-yr Treasury auction will come out around 1:00 et.
MBS are up +5/32 (FNMA 30-yr 3.5 at 103.13), around 6/32 higher than yesterday at this time.
The Minutes from the October 22 European Central Bank (ECB) meeting revealed a likely need for additional stimulus to boost the economies in the region. The possibility of an expansion of the bond buying program as soon as the next ECB meeting onDecember 3 has lifted global bonds this morning, including U.S. MBS. The Dow is up 10 points. Leading Indicators will be released at 10:00 et.
Today’s early economic data had little impact. Philly Fed rose to 1.9, a little above the consensus of 0.0. Weekly Jobless Claims fell to 271K, which was very close to expectations.
MBS are down -2/32 (FNMA 30-yr 3.5 at 103.07), around 1/32 higher than yesterday at this time. Favorable repricing took place yesterday.
This morning, October Housing Starts fell 11% from September to an annual rate of 1060K, well below the consensus of 1160K. Most of the decline came from multi-family units. Building Permits matched expectations with an increase of 4%. Single-family permits rose to the highest level since December 2007. The Dow is up 100 points. The Minutes from the October 28 Fed meeting will be released at 2:00 et.
MBS are up +2/32 (FNMA 30-yr 3.5 at 103.10), around 5/32 above morning levels, and near the high for the day. Favorable repricing took place. Headlines about the Paris attacks and related incidents caused some volatility in U.S. stock and bond markets today. The November NAHB Housing Index showed that home builder confidence declined from 65 to 62, below the consensus of 64. The Dow is up 10 points. Tomorrow, Housing Starts and the Minutes from the October 28 Fed meeting will be released.
MBS are up +1/32 (FNMA 30-yr 3.5 at 103.06), around 3/32 higher than Friday at this time. Favorable repricing took placeFriday.
It has been a quiet morning. The Empire State regional manufacturing index rose to -10.7, below the consensus of -5.0. The Dow is up 50 points. No more economic data will be released today.
MBS are up +4/32 (FNMA 30-yr 3.5 at 103.03), around 3/32 higher than yesterday at this time.
Weaker than expected economic data has lifted MBS this morning. October Retail Sales rose just 0.1%, below the consensus for an increase of 0.3%. Excluding the volatile auto component, the results fell short of the consensus by a similar amount. October PPI fell 0.4% from September, below the consensus for an increase of 0.1%, and it was 1.6% lower than one year ago. Core PPI, which excludes food and energy, decreased 0.3%, below the consensus for an increase of 0.1%. Core PPI was just 0.1% higher than one year ago. The Dow is down 50 points. Consumer Sentiment will be released at 10:00 et.
MBS are down -17/32 (FNMA 30-yr 3.0 at 100.01), around 16/32 lower than yesterday at this time. Early investors may have priced at higher levels.
A stronger than expected Employment report caused a large decline in MBS prices this morning. Against a consensus forecast of 190K, the economy added 271K jobs in October, the strongest reading of the year. Upward revisions to prior months added another 12K. The average job gains over the past three months were 180K. The Unemployment Rate declined from 5.1% to 5.0%, below the consensus for a flat reading of 5.1%, and the lowest level since April 2008. Average Hourly Earnings, a proxy for wage growth, also far exceeded expectations, and they were 2.5% higher than a year ago. After the report, investors increased their expectations for a rate hike at the next Fed meeting in December. The Dow is down 25 points. No more economic data will be released today.
MBS are up +1/32 (FNMA 30-yr 3.0 at 100.24), around 5/32 lower than yesterday at this time. Some unfavorable repricing was seen yesterday.
This morning, the ADP forecast for private sector job gains in October was 182K, very close to the consensus of 180K. The September Trade Deficit also came in very close to expectations. The Dow is down 25 points. ISM Services will be released at10:00 et. The results from the postponed 2-yr Treasury auction will come out around 1:00 et. There will be many Fed speakers today as well.
Bond markets ended Friday on a strong note as a push was made for month end buying, but all things considered, it was a relatively uneventful day. Last week’s FOMC announcement created some instability both last week and moving forward. Having said that, upcoming economic data will be extremely important to watch given that any anomaly could be enough to stray the Fed from the anticipated December rate hike. Items of interest on the economic calendar for today include: the PMI MFG Index, the ISM MFG Index, and Construction Spending Data.