Archive | February 2016

HAPPY LEAP DAY!!!

MBS are up +2/32 (FNMA 30-yr 3.0 at 102.14), around 3/32 higher than Friday at this time.

This morning, the Chicago PMI regional manufacturing index declined to 47.6, well below the consensus of 53.0. Readings below 50 indicate contraction in the sector. There has been little reaction to the data. The Dow is up 10 points. Pending Home Sales will be released at 10:00 et.

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Market Update 2/26/2016

MBS are down -9/32 (FNMA 30-yr 3.0 at 102.11), around 7/32 lower than yesterday at this time. Some favorable repricing was seen yesterday.

This morning, MBS moved lower following the release of the GDP data. Fourth quarter GDP was revised higher from 0.7% to 1.0%, above the consensus for a decline to 0.4%. The biggest surprises were that the decline in inventories was smaller than expected and that imports were lower than expected. The Dow is up 50 points. The Core PCE price index, Personal Income, and Consumer Sentiment will be released at 10:00 et. The results from the 7-yr Treasury auction will come out around 1:00 et.

Market Update 2/25/2016

MBS are up +3/32 (FNMA 30-yr 3.0 at 102.18), around 7/32 lower than yesterday at this time. First favorable and later unfavorable repricing took place yesterday.

This morning, January Durable Orders rose 4.9% from December above the consensus for an increase of 3.0%. This follows a decline of 4.6% last month. Weekly Jobless Claims rose to 272K, which was close to expectations. The Dow is down 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.

Market Update 2/24/2016

MBS are up +6/32 (FNMA 30-yr 3.0 at 102.25), around 16/32 higher than yesterday at this time. Favorable repricing took place yesterday. Early investors may have priced at lower levels.

Concerns about the pace of global economic growth have hurt stocks and helped MBS this morning. The Dow is down 200 points. New Home Sales will be released at 10:00 et. The results from the 5-yr Treasury auction will come out around 1:00 et.

2/23/2016 Market NEWS

MBS are up +1/32 (FNMA 30-yr 3.0 at 102.16), around 7/32 above volatile morning levels, and near the high for the day. Favorable repricing took place. A decline in stocks helped MBS to recover early losses. Demand was close to average for the 2-yr Treasury auction. The Dow is down 190 points. Tomorrow, New Home Sales will be released at 10:00 et. The results from the 5-yr Treasury auction will come out around 1:00 et.

January existing home sales increased slightly from December to an annual rate of 5.47M, above the consensus of 5.30M, and the second highest pace in the last seven years. Existing home sales were 11% higher than a year ago. Total inventory of existing homes available for sale rose 3% to a 4.0-month supply, but it was still 2% lower than a year ago. The median existing-home price was 8% higher than a year ago. Separately, Consumer Confidence declined to 92.2, far below the consensus of 97.5, and the lowest reading since July 2015.

Monday Market Update 2/22/2016

MBS are down -1/32 (FNMA 30-yr 3.0 at 102.15), around 1/32 higher than Friday at this time. Some unfavorable repricing took place Friday.

Despite a rally in stocks, it has been a quiet morning for MBS. The Dow is up 200 points. No economic data will be released today.

Update 2/19/2016 Inflation sneaking up!

MBS are down -3/32 (FNMA 30-yr 3.0 at 102.14), around 6/32 higher than yesterday at this time. Favorable repricing took place yesterday. Early investors may have priced at lower levels.

It has been a volatile morning. MBS prices declined following the release of stronger than expected CPI inflation data (see below) and then recovered some of their losses. The Dow is down 100 points. No more economic data will be released today.

January CPI was flat from December, above the consensus for a decrease of 0.1%. CPI was 1.4% higher than a year ago, the highest level since October 2014. Core CPI, which excludes food and energy, rose 0.3%  from December, above the consensus for an increase of 0.1%. Core CPI was 2.2% higher than a year ago, the highest level since June 2012.

Economic Update 2/18/2016

MBS are up +1/32 (FNMA 30-yr 3.0 at 102.08), around 1/32 lower than yesterday at this time.

This morning, the Philly Fed regional manufacturing index rose a little to -2.8, close to the consensus of -3.0. Weekly Jobless Claims fell to 262K, below the consensus of 275K. The Dow is up 25 points. No more economic data will be released today.

02/17/2016 MArket “NEWS”

MBS are down -3/32 (FNMA 30-yr 3.0 at 102.08), around 1/32 lower than yesterday at this time.

A batch of mixed economic data (see below) had little impact this morning. The Dow is up 100 points. The Fed Minutes from the December 16 meeting will come out at 2:00 et. These detailed Minutes provide additional insight into the debate between Fed officials.

January Housing Starts fell 4% from December to an annual rate of 1099K, well below the consensus of 1175K. Building Permits came in close to expectations. January Industrial Production jumped 0.9%, well above the consensus for an increase of 0.4%. The December results were revised lower from -0.4% to -0.7%. January PPI rose 0.1% from December, above the consensus for a decline of 0.2%, and it was 0.2% lower than one year ago. Core PPI, which excludes food and energy, rose 0.4%, above the consensus for an increase of 0.1%. Core PPI was 0.6% higher than one year ago.

Market Update 2/16/2016

MBS are down -2/32 (FNMA 30-yr 3.0 at 102.08), around 13/32 lower than Friday at this time. Unfavorable repricing took placeFriday.

Yesterday’s hints of additional stimulus from the European Central Bank (ECB) have helped U.S. stocks and hurt MBS this morning. In the U.S., the Empire State regional manufacturing index came in at -16.6, below the consensus of -10.0. Oil prices have declined a little after a meeting between top producers failed to produce a deal to cut supply. The Dow is up 100 points. NAHB Housing will be released at 10:00 et.