MBS are up +4/32 (FNMA 30-yr 3.0 at 102.07), around 2/32 higher than yesterday at this time.
Today’s early economic data had little impact on MBS. April Durable Orders jumped 3.4% from March, far above the consensus of 0.5%. Excluding volatile transportation orders, however, the results matched expectations. Weekly Jobless Claims declined to 268K, a little below the consensus of 275K. The Dow is up 25 points. Pending Home Sales will be released at 10:00 et. The results from the 7-yr Treasury auction will come out around 1:00 et.
MBS are up +2/32 (FNMA 30-yr 3.0 at 102.09), around 4/32 higher than Friday at this time. Some favorable repricing was seen Friday.
It has been a quiet morning. The Dow is up 10 points. No economic data will be released today.
MBS are up +2/32 (FNMA 30-yr 3.0 at 102.05), around 4/32 lower than yesterday at this time. Unfavorable repricing took place yesterday. Early investors may have priced at lower levels.
A decline in stocks has lifted MBS this morning. Weekly Jobless Claims declined to 278K, slightly above the consensus of 275K. The Philly Fed regional manufacturing index fell to -1.8, below the consensus of 3.0. The Dow is down 150 points. No more economic data will be released today. There will be a couple of Fed speakers today who could have an impact on MBS.
MBS are down -11/32 (FNMA 30-yr 3.0 at 102.01), around 8/32 below morning levels, and near the low for the day. Unfavorable repricing took place. Hawkish Fed Minutes (see below) caused a large decline in MBS this afternoon. No economic data was released. The Dow is down 10 points. Tomorrow, Jobless Claims and Philly Fed will be released at 8:30 et.
The Fed Minutes from the April 27 Fed meeting caught investors by surprise. Prior to this week, investors had assigned a less than 5% chance that there would be a federal funds rate hike at the next Fed meeting on June 15. Following speeches by Fed officials this week and today’s Minutes, investors have significantly moved forward their expected timeline for rate hikes. In the Minutes, Fed officials made clear that they will consider raising rates as soon as June if economic conditions continue to improve sufficiently. Both stocks and bonds moved lower today after the release of the minutes.
MBS are down -3/32 (FNMA 30-yr 3.0 at 102.09), around 10/32 lower than yesterday at this time. Some unfavorable repricing took place yesterday. Early investors may have priced at higher levels.
Concerns about what the Fed minutes may reveal later today have hurt MBS yesterday and this morning. Recent comments from Fed officials have hinted that the Fed may be more likely to raise the federal funds rate sooner than investors expect. The Dow is down 10 points. The Fed Minutes from the April 27 meeting will be released at 2:00 et.
MBS are up +1/32 (FNMA 30-yr 3.0 at 102.19), around 1/32 higher than yesterday at this time.
Stronger than expected economic data (see below) had little impact on MBS this morning. The Dow is down 75 points. No more economic data will be released today.
April CPI increased 0.4% from March, above the consensus for an increase of 0.3%. CPI was 1.1% higher than a year ago. Core CPI, which excludes food and energy, rose 0.2% from March, matching the consensus. Core CPI was 2.1% higher than a year ago, down from a multi-year high of 2.3% in February. April housing starts rose 7% from March to an annual rate of 1172K, above the consensus of 1135K. Starts on single-family homes rose 3%, while multi-family increased 11%. Building permits came in a little lower than expected. Industrial production jumped 0.7%, well above the consensus of 0.2%, and the largest monthly increase since November 2014.
MBS are down -4/32 (FNMA 30-yr 3.0 at 102.19), around 1/32 lower than Friday at this time. Favorable repricing took place Friday. Early investors may have priced at higher levels.
Despite weaker than expected manufacturing data, MBS prices have drifted lower this morning. The Empire State regional manufacturing index declined to -9.0, well below the consensus of 6.0. The Dow is up 75 points. NAHB Housing will be released at 10:00 et.
MBS are down -5/32 (FNMA 30-yr 3.0 at 102.18), around 1/32 lower than yesterday at this time.
MBS prices have declined this morning, despite weaker than expected labor market data. Weekly Jobless Claims rose to 294K, above the consensus of 270K. Import Prices rose 0.3%, below the consensus of 0.6%. The Dow is up 25 points. No more economic data will be released today. The results from the 30-yr Treasury auction will come out around 1:00 et.
Rates held firm, yesterday, at levels that rival three year lows. While last week there was quite a bit of economic data released (closing with a significant NFP miss), this week is relatively quiet, with the primary headlines being Fed Speakers, Retail Sales, and PPI. Those, for the most part, come later in the week, and thus limited data motivates strong momentum heading into these figures. Consolidation continues, but there has yet to be an indication of a trend towards higher rates, oil remains low, and despite acting as somewhat of a hurdle, corporate issuance has yet to stifle bonds. Simply put, yesterday was “a quiet, sideways day with a shade of green. I’ll take it. From here I’d think we drift sideways. Rates are strong right now… locking makes a lot of sense here.”
MBS are up +9/32 (FNMA 30-yr 3.0 at 102.27), around 8/32 above morning levels, and near the high for the day. Favorable repricing took place. MBS prices moved higher today ahead of tomorrow’sEmployment report. The Dow is up 10 points. Tomorrow, the key Employment report will be released at 8:30 et. The consensus is for an increase of 200K jobs in April.
Freddie Mac reported that average mortgage rates fell in the week through May 5, with 30-yrs hitting 3.61%, from 3.66% the prior week.