MBS are up +3/32 (FNMA 30-yr 3.5 at 103.08), around 1/32 higher than yesterday at this time.
This morning, investors are waiting for the outcome of today’s Fed meeting. The Dow is down 10 points. Existing Home Sales will be released at 10:00 et. The Fed announcement will come out at 2:00 etand Fed Chair Yellen’s press conference will begin at 2:30. Investors widely expect the Fed to announce that it will soon begin to reduce the quantity of Treasury and mortgage securities on its balance sheet. Any information about the pace of future rate hikes might have a greater impact on MBS.
MBS are down -8/32 (FNMA 30-yr 3.5 at 103.19), around 2/32 below morning levels. Investor relief that the storm damage was not even worse and that North Korea did not conduct additional weapon tests hurt safer assets such as MBS this morning. Weaker than average demand for the 3-yr Treasury auction later pushed MBS to their lows. No economic data was released today. The Dow is up 250 points. Tomorrow, 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 will take place overnight for FNMA and FHLMC 30-yr securities.
MBS are up +1/32 (FNMA 30-yr 3.5 at 103.20), around 3/32 higher than yesterday at this time.
The Employment report was weaker than expected in nearly every area, yet there was little lasting impact on MBS. Against a consensus forecast of 180K, the economy added just 156K jobs in August. In addition, downward revisions subtracted 21K jobs from the results for prior months. The unemployment rate increased from 4.3% to 4.4%, above the consensus for a flat reading of 4.3%. Average hourly earnings, an indicator of wage growth, also fell short of expectations. They were 2.5% higher than a year ago, the same annual rate as last month. Since the data had been gathered before the storm hit, the results do not reflect any distortions from the hurricane in Texas, The Dow is up 50 points. The ISM national manufacturing index, Construction Spending, and Consumer Sentiment will be released at 10:00 et.
MBS are up +1/32 (FNMA 30-yr 3.5 at 103.17), around 2/32 higher than yesterday at this time.
A large batch of economic data contained few surprises and caused little reaction this morning. The July Core PCE price index rose 0.1% from June, matching the consensus. It was 1.4% higher than a year ago, down from an annual rate of 1.5% last month. The Fed’s target level for inflation is 2.0%. July Personal Income rose 0.4% from June, a little above the consensus for an increase of 0.3%. Weekly Jobless Claims were 236K, slightly below the consensus of 240K. The Chicago PMI regional manufacturing index was unchanged at 58.9, which was very close to expectations. The Dow is up 60 points. Pending Home Sales will be released at 10:00 et.
MBS are up +5/32 (FNMA 30-yr 3.5 at 103.20), around 9/32 higher than yesterday at this time.
North Korea launched a missile which flew over Japan, causing investors to shift to safer assets this morning, including MBS. The Dow is down 50 points. Consumer Confidence 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 +6/32 (FNMA 30-yr 3.5 at 103.12), close to morning levels. Comments from President Trump about possibly ending the NAFTA trade agreement lifted MBS today. July New Home Sales fell 9% from June to an annual rate of 571K, well below the consensus of 610K, and the lowest level in seven months. However, the results for June were revised higher, offsetting some of the shortfall. The Dow is down 90 points. Tomorrow, Jobless Claims and Existing Home Sales will be released. In addition, global central bankers will be attending the annual Jackson Hole conference tomorrow through Saturday, and many will be making speeches.
MBS are up +5/32 (FNMA 30-yr 3.5 at 103.11), around 3/32 higher than yesterday at this time.
Yesterday, investors grew more optimistic that President Trump would work with Congress to pass pro-growth legislation, and it was negative for MBS. Comments from Trump about NAFTA and a border wall have caused sentiment to reverse today, and MBS have recovered yesterday’s losses. The Dow is down 75 points. New Home Sales will be released at 10:00 et.
MBS are down -4/32 (FNMA 30-yr 3.5 at 103.07), close to morning levels. Reports that the Trump administration and Republican lawmakers have made progress on tax reform lifted stocks and hurt MBS today. Proposed changes in tax policy would be pro-growth overall, which caused investors to raise their outlook for future inflation. No economic data was released today. The Dow is up 200 points. Tomorrow, New Home Sales will be released at 8:30 et.
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.
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.