Archive | September 2016

Market Update 9/28/2016

MBS are up +1/32 (FNMA 30-yr 3.0 at 104.03), around 3/32 lower than yesterday at this time.

This morning, August Durable Orders were flat from July, better than the consensus for a decline of 2.0%. Excluding the volatile transportation component, Durable Orders came in very close to expectations with a decline of 0.4% from July. There was little reaction to the data. The Dow is up 50 points. No more economic data will be released today. The results from the 7-yr Treasury auction will come out around 1:00 et.

Whats the Market doing today?

MBS are up +9/32 (FNMA 30-yr 3.0 at 103.27), around 4/32 above morning levels, and at the high for the day. It was a volatile session, as investors debated the message from yesterday’s Fed meeting. The Dow is up 100 points. Tomorrow, no economic data will be released.

August existing home sales decreased 1% from July to an annual rate of 5.33M, below the consensus of 5.45M. Existing home sales were 1% higher than a year ago. Total inventory of existing homes available for sale fell 3% to a 4.6-month supply, and it was 10% lower than a year ago. The median existing-home price was 5% higher than a year ago. According the NAR, a lack of inventory and rising prices are impeding home sales.

Freddie Mac reported that average mortgage rates fell in the week through September 22, with 30-yrs hitting 3.48%, from 3.50% the prior week.

TODAYs Tip of the Day

Did your Loan office Lock in your rate before the Fed released their notes?  If they did they did you an injustice:  WHY?  The fed help steady and rates actually dropped since then.  CALL me if you are looking for a mortgage or are in the process to get a 2nd opinion!!

Here is todays NEWS::

MBS are up +5/32 (FNMA 30-yr 3.0 at 103.23), around 9/32 higher than yesterday at this time. Favorable repricing took place yesterday.

The rally following yesterday’s Fed meeting has continued this morning. Weekly Jobless Claims declined to 252K, below the consensus of 260K. The Dow is up 150 points. Existing Home Sales will be released at 10:00 et.

FED Reaction

MBS are up +7/32 (FNMA 30-yr 3.0 at 103.20), around 6/32 above morning levels, and near the high for the day. Favorable repricing was seen. Today’s Fed statement was viewed as favorable for bonds (see below), lifting MBS today. The Dow is up 160 points. Tomorrow, Jobless Claims and Existing Home Sales will be released.

As expected, the Fed made no change in the federal funds rate today. The statement said that the case for a rate hike “has strengthened,” but that Fed officials wanted to see more progress in reaching their goals before tightening. Three out of the twelve voting members of the Fed dissented, which is an unusually high degree of disagreement. Investor expectations for a rate hike before the end of 2016 were little changed after the meeting.

FED DAY!!

MBS are up +1/32 (FNMA 30-yr 3.0 at 103.14), around 1/32 higher than yesterday at this time.

This morning, the Bank of Japan (BOJ) announced some policy changes, but they had little impact on U.S. MBS prices. The BOJ said it will target a yield of zero for Japanese 10-yr bonds in an effort to boost inflation. This is unconventional in that central banks typically focus on setting the level of just short-term rates. Investors now are waiting for the outcome of the Fed meeting this afternoon. The Dow is up 75 points. No economic data will be released today. The Fed announcement will come out at 2:00 et. Fed Chair Yellen’s press conference will begin at 2:30 et. Investors have assigned a low probability that the Fed will raise the federal funds rate today.

Mid Day Update 9/14/2016

MBS are up +7/32 (FNMA 30-yr 3.0 at 103.13), around 2/32 above morning levels, and near the high for the day. Scattered favorable repricing was seen. After posting large losses over the past week, MBS recovered a portion today. The Dow is down 30 points. Tomorrow will be a big day. The Bank of England announcement will come out around 7:30 et. In the U.S., Retail Sales, PPI, Jobless Claims, Empire State, Philly Fed, and Industrial Production will be released.

Market Update 9/6/2016

MBS are up +11/32 (FNMA 30-yr 3.0 at 103.31), around 9/32 above morning levels, and near the high for the day. Favorable repricing took place. Weaker than expected data lifted MBS today. The ISM national services index declined sharply to 51.4, well below the consensus of 55.0, and the lowest level since February 2010. This followed a big miss on the the ISM national manufacturing index last week. Today’s data resulted in a nice rally in MBS prices and a decline in the expectations for a Fed rate hike this month. The Dow is up 50 points. Tomorrow, the JOLTS report will be released at10:00 et. The Fed’s Beige Book will come out at 2:00 et.

Market Update 9/1/2016

MBS are up +4/32 (FNMA 30-yr 3.0 at 103.24), around 6/32 above morning levels, and near the high for the day. Favorable repricing took place. Weaker than expected manufacturing data lifted MBS today. The ISM national manufacturing index fell to 49.4, well below the consensus of 52.0, and the lowest level since January. Readings below 50 signal a contraction in the sector. July Construction Spending was flat from June, which was weaker than expected, but the June results were revised significantly higher. The Dow is up 20 points. Tomorrow, the key Employment report will be released at8:30 et. The consensus is for an increase of 175K jobs in August.

Freddie Mac reported that average mortgage rates rose in the week through September 1, with 30-yrs hitting 3.46%, from 3.43% the prior week.