Archive | August 2017

Housing numbers miss expectations

MBS are down -1/32 (FNMA 30-yr 3.5 at 103.02), around 1/32 higher than yesterday at this time.

This morning, July Housing Starts fell 5% from June to an annual rate of 1155K, below the consensus of 1220K. The decline was nearly entirely due to multi-family units. Single-family starts posted just a slight decline. Housing starts are highly volatile from month to month. The Dow is up 50 points. No more economic data will be released today. The Minutes from the July 26 Fed meeting will come out at 2:00 et. Investors will be looking for clues about the Fed’s plans for the pace of tightening monetary policy.

Good economic news = Higher Mortgage RAtes

MBS are down -6/32 (FNMA 30-yr 3.5 at 103.01), around 6/32 lower than yesterday at this time.

MBS responded in the typical fashion to stronger than expected economic data this morning. July Retail Sales rose 0.6% from June, well above the consensus for an increase of 0.3%. Excluding the volatile auto component, Retail Sales rose 0.5%, above the consensus for an increase of 0.3%. The results for June for both readings were revised significantly higher as well. The Empire State regional manufacturing index jumped to 25.2, far above the consensus of 13.0. July Import Prices rose 0.1% from June, matching expectations. The Dow is up 10 points. No more economic data will be released today.

STAY Tuned for possible LOWER rates

MBS are up +2/32 (FNMA 30-yr 3.5 at 103.11), around 1/32 lower than yesterday at this time.

Weaker than expected inflation data has helped MBS a little this morning. July PPI fell 0.1% from June, below the consensus for an increase of 0.1%, and it was 1.9% higher than one year ago. Core PPI, which excludes food and energy, also decreased 0.1%, below the consensus for an increase of 0.2%. Core PPI was 1.8% higher than one year ago. Weekly Jobless Claims came in close to expectations. The Dow is down 100 points. No more economic data will be released today. The results from the 10-yr Treasury auction will come out around 1:00 et.