June 12 2017

MBS are down -1/32 (FNMA 30-yr 3.5 at 103.01), around 1/32 lower than Friday at this time.

It has been a quiet morning. The Dow is down 50 points. No economic data will be released today. The results from the 3-yr Treasury auction will come out around 11:30 et and the 10-yr Treasury auction will come out around 1:00 et.

The monthly rollover took place over the weekend for FNMA and FHLMC 30-yr securities. The current coupon switched from the June to the July contract. If you are tracking daily MBS price movements, July MBS prices reflected a drop of about -5/32 from June. 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.

BIG DAY

MBS are down -1/32 (FNMA 30-yr 3.5 at 103.09), close to morning levels. It was a quiet session. Former FBI director Comey’s testimony had little impact on MBS. The Dow is up 10 points. Tomorrow, no economic data will be released. The results from the British election may affect MBS prices tomorrow at the open. Prime Minister May is expected to win. If she does, it also will be important to see how many seats in Parliament her party won.

Freddie Mac reported that average mortgage rates fell in the week through June 8, with 30-yrs hitting 3.89%, from 3.94% the prior week.

Market update 6/8/2017

MBS are down -1/32 (FNMA 30-yr 3.5 at 103.09), around 4/32 lower than yesterday at this time.

As expected, the European Central Bank (ECB) made no change in policy this morning. The statement removed a reference to the possibility of further rate cuts. ECB President Draghi gave a more upbeat view of the outlook for economic growth, but he said that inflation pressures remained low. There was little reaction to the meeting. In the U.S., weekly Jobless Claims fell to 245K, a little above the consensus of 240K. The Dow is up 10 points. No more economic data will be released today. Former FBI director Comey will testify at 10:00 et. Some results from the British election might be clear before the close of U.S. markets today, but the actual outcome likely will not be known until after the close.

Market Update

MBS are up +1/32 (FNMA 30-yr 3.5 at 103.07), around 7/32 higher than yesterday at this time. Favorable repricing took place yesterday.

This morning, the Philly Fed regional manufacturing index jumped to 38.8, well above the consensus of 20.0. Weekly Jobless Claims fell to 232K, below the consensus of 240K. The Dow is down 25 points. No more economic data will be released today.

Market Update 5/17/2017

MBS are up +10/32 (FNMA 30-yr 3.5 at 103.00), around 13/32 higher than yesterday at this time. Favorable repricing took place yesterday.

After the election, stocks and bond yields moved higher based on expected policy changes under the Trump administration. The recent controversy has increased the uncertainty about the ability of the President to implement these changes. As a result, stocks have dropped and MBS prices have climbed this morning. The Dow is down 175 points. No economic data will be released today.

Market Update 5/16/2017

MBS are up +1/32 (FNMA 30-yr 3.5 at 102.19), around 2/32 higher than yesterday at this time.

Mixed economic data has had little impact on MBS this morning. April Housing Starts fell 3% from March to an annual rate of 1.17 million, below the consensus of 1.26 million. April Industrial Production rose 1.0% from March, above the consensus for an increase of just 0.5%. The Dow is up 50 points. No more economic data will be released today.

Morning update 5/11/17

MBS are up +1/32 (FNMA 30-yr 3.5 at 102.04), around 7/32 lower than yesterday at this time. Unfavorable repricing took place yesterday.

This morning, April PPI rose 0.5% from March, well above the consensus of 0.2%, and it was 2.5% higher than a year ago. Core PPI also exceeded expectations and was 1.9% higher than a year ago, up from 1.6% last month. Weekly Jobless Claims fell to 236K, below the consensus of 245K. There has been little reaction to today’s data. The Dow is down 100 points. No more economic data will be released today. The results from the 30-yr Treasury auction will come out around 1:00 et.

Market Update

BEEN A BAD Week for Interest rates

MBS are down -4/32 (FNMA 30-yr 3.5 at 102.03), around 8/32 below morning levels, and near the low for the day. Unfavorable repricing took place. Weak demand for the 10-yr Treasury auction was the main cause of the decline in MBS prices today. The Dow is down 30 points. Tomorrow, PPI and Jobless Claims will be released at 8:30 et. The results from the 30-yr Treasury auction will come out around 1:00 et.

TGIF

MBS are up +1/32 (FNMA 30-yr 3.5 at 102.20), around 5/32 higher than yesterday at this time.

This morning, the important Employment report came in right on target and had little net impact on MBS. Against a consensus forecast of 190K, the economy added 211K jobs in April. Downward revisions subtracted 6K jobs from the results for prior months. The unemployment rate declined from 4.5% to 4.4%, below the consensus of 4.6%, and the lowest level since May 2007. Average hourly earnings, an indicator of wage growth, matched expectations. They were 2.5% higher than a year ago, down from a revised 2.6% last month. The Dow is down 20 points. No more economic data will be released. There will be several Fed speakers today.

Market Update 5/3/2017

MBS are down -1/32 (FNMA 30-yr 3.5 at 102.26), around 4/32 higher than yesterday at this time. Favorable repricing was seen yesterday.

This morning, the ADP estimate for private sector job gains in April was 177K, a little above the consensus of 170K. The Dow is down 25 points. ISM Services will be released at 10:00 et. The Fed statement will be released at 2:00 et. No change in rates is expected, but investors will be looking for guidance about the pace of future tightening.