Archive | April 2017

Market Update 4/27/2017

MBS are down -1/32 (FNMA 30-yr 3.5 at 102.20), around 5/32 higher than yesterday at this time. Favorable repricing took place yesterday.

With few surprises from the ECB or the data, it has been a quiet morning. The European Central Bank (ECB) made no policy changes. Some investors think that ECB officials might hint at tighter policy at the next meeting if Macron, the pro-EU candidate, wins the French Presidential election on May 7. In the U.S., March Durable Orders rose 0.7% from February, below the consensus of 1.2%, but the February results were revised higher to 2.3% from 1.7%. Weekly Jobless Claims rose to 257K, above the consensus of 245K. The Dow is up 10 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.

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Market Update !!!!!

MBS are down -5/32 (FNMA 30-yr 3.5 at 102.21), around 10/32 lower than Friday at this time. Some unfavorable repricing took place Friday.

This morning, investors have shifted to riskier assets in reaction to the outcome of yesterday’s key French Presidential election (see below). While a decline in MBS prices very late in the day on Friday has made today’s drop look a little smaller than it might have been, global bond markets generally are performing poorly today. The Dow is up 200 points. No economic data will be released today.

One pro-EU candidate (Macron) and one anti-EU candidate (Le Pen) won the first round of the election and will compete in the second round on May 7. Polls indicate that Macron is favored to win by about a 65% to 35% margin. Investor concerns about a French exit from the European Union were eased by the election results, causing a reversal of the flight to safety trade.

TGIF

No much out today but rates got a little better

MBS are up +2/32 (FNMA 30-yr 3.5 at 102.31), around 1/32 lower than yesterday at this time.

It has been a quiet morning ahead of today’s housing data. The Dow is down 10 points. Existing Home Sales will be released at 10:00 et et. News about Sunday’s French election may influence MBS prices as well.

Market UPDATE 4/20/2017

MBS are down -2/32 (FNMA 30-yr 3.5 at 102.31), around 5/32 lower than yesterday at this time.

This morning, the Philly Fed regional manufacturing index dropped to 22.0, below the consensus of 25.0. Weekly Jobless Claims rose to 244K, slightly below the consensus of 245K. There was little reaction to the data. The Dow is up 25 points. No more economic data will be released today.

Market Update

Not Much going on today

MBS are down -5/32 (FNMA 30-yr 3.5 at 103.04), around 1/32 higher than yesterday at this time. Favorable repricing took place yesterday.

MBS have given back some of yesterday’s gains this morning. The Dow is up 10 points. The Fed’s Beige Book will be released at 2:00 et.

Rates continue to IMPROVE

MBS are up +10/32 (FNMA 30-yr 3.5 at 103.08), around 5/32 above morning levels, and near the high for the day. Favorable repricing was seen. Weakness in global stock markets helped MBS today. The Dow is down 110 points. Tomorrow, the Fed’s Beige Book will be released at 2:00 et. News about Sunday’s French election may influence MBS prices for the rest of the week as well.

Market Update 4/18/2017

A decline in global stock markets has boosted MBS this morning. In the U.S., March Housing Starts declined 7% from February to an annual rate of 1215K, below the consensus of 1260K. Building Permits were a little higher than expected, however. March Industrial Production rose 0.5% from February, matching the consensus. The Dow is down 75 points. No more economic data will be released today.

Rates Continue to IMPROVE

MBS are up +12/32 (FNMA 30-yr 3.5 at 102.21), around 7/32 above morning levels, and near the high for the day. Favorable repricing took place. Increased geopolitical concerns caused some investors to seek relatively safer assets such as U.S. Treasuries and MBS today. Investors view the top potential trouble spots as the French elections, Syria, and North Korea. In the U.S., the JOLTS report showed that job openings rose from 5.63M to 5.74M in February. Demand was a little below average for the 10-yr Treasury auction. The Dow is down 10 points. Tomorrow, Import Prices will be released at 8:30 et. The results from the 30-yr Treasury auction will come out around 1:00 et.

BIG MOVE so far Today

MBS are up +5/32 (FNMA 30-yr 3.5 at 102.15), around 6/32 higher than yesterday at this time.

A decline in stocks has helped MBS this morning. The Dow is down 50 points. JOLTS will be released at 10:00 et. The results from the 10-yr Treasury auction will come out around 1:00 et.

The monthly rollover took place overnight for FNMA and FHLMC 30-yr securities. The current coupon switched from the April to the May contract. If you are tracking daily MBS price movements, May MBS prices reflected a drop of about -6/32 from April. This change is priced in over the course of the month, so the impact on mortgage rates on the day of the rollover is generally no greater than on any other day of the month.

TGIF

MBS are up +6/32 (FNMA 30-yr 3.5 at 102.27), around 6/32 higher than yesterday at this time. Some unfavorable and later some favorable repricing was seen yesterday.

Weaker than expected economic data and a U.S. air strike have lifted MBS this morning. Against a consensus forecast of 180K, the economy added just 98K jobs in March. In addition, downward revisions subtracted 38K jobs from the results for prior months. The unemployment rate declined from 4.7% to 4.5%, well below the consensus for a flat reading of 4.7%, and the lowest level since May 2007. The unexpected decline was due to both job gains and to people leaving the labor force. Average hourly earnings, an indicator of wage growth, fell slightly short of expectations. They were 2.7% higher than a year ago, down from 2.8% last month. Last night, the U.S. launched a missile strike in Syria. In response, investors shifted to relatively safer assets, including MBS. The Dow is up 10 points. No more economic data will be released today. The Fed’s Dudley will be speaking at 12:15 et.