Weekly jobless claims was the first report this morning. Claims were expected to have increased 10K to265K, as reported claims increased 3K to 259K. The smoother 4 week average continues to decline; 263.25K frm 265K last week. Claims are hanging near 42 year lows.
News frm the ECB meeting trickling out early today; Draghi saying the bank will continue to assess its policies to counter the effects of slowing emerging markets that are dragging the EU down. He suggested the EU likely will need increased monetary stimulus; markets taking that as a move in Dec. “Concerns over growth prospects in emerging markets and possible repercussions for the economy from developments in commodity markets signal downside risks to the outlook for growth and inflation,” Draghi said. The bank let interest rates unchanged at the meeting, at 0.05% and the deposit rate at -0.2%. The ECB is currently buying €60B a month ($67B). Rates declined on Draghi’s comments; the German 2 yr note yield down three basis points to 0.03% to a minus 0.29%.
At 9:00 the August FHFA home price index, expected to have increased 0.5%, increased just 0.3%. Yr/yr the index is up 5.5%, down frm July’s yr/yr at 5.8%. More confusion; other recent indications and reports on the housing sector have implied increasing prices, the exception has been Case/Shiller; this data lines up with recent data frm Case/Shiller’s reports. Not a market mover.
Even before the stock market opened this morning the MBS market was volatile, very early prices opened down as much as 20 bps, then in a very thinly traded market the prices jumped back to unchanged by 9:00 am. The 10 yr note, on comments frm Mario Draghi, edged closer to 2.00%, at 2.02% at 9:00. The DJIA opened +129, NASDAQ +35, S&P +14. The 10 slipped back to unchanged at 2.03%; 30 yr FNMA 3.5 coupon -2 bps frm yesterday’s close and unchanged frm 9:30 yesterday.
Two key reports at 10:00 am; Sept existing home sales up 4.7%, better than +1.0% expected. Annual sales up 8.8% yr/yr. Inventories -3.0% yr/yr, the median sales price $221,900 +6.1% yr/yr. August sales were revised slightly lower by 100K. Sept leading economic indicators were expected 0.0% as reported declined 0.2%, August indicators revised from +0.1% to 0.0%, the decline was the second this year, the other hit in Feb. LEI is a composite index of ten economic indicators that should lead overall economic activity, but recently traders have put less emphasis on it.
Stocks rallying the bond and mortgage markets flat-lining recently. Same story, we do not want to float, taking long position in the bond or mortgage markets until the 10 can break below 2.00%. We continue to believe rates will decline more but until the market actually meets our expectations we think the best approach now is to keep locked. There is little reward here but increased risk that prices could decline at these levels; we will float to begin though.
News frm the ECB meeting trickling out early today; Draghi saying the bank will continue to assess its policies to counter the effects of slowing emerging markets that are dragging the EU down. He suggested the EU likely will need increased monetary stimulus; markets taking that as a move in Dec. “Concerns over growth prospects in emerging markets and possible repercussions for the economy from developments in commodity markets signal downside risks to the outlook for growth and inflation,” Draghi said. The bank let interest rates unchanged at the meeting, at 0.05% and the deposit rate at -0.2%. The ECB is currently buying €60B a month ($67B). Rates declined on Draghi’s comments; the German 2 yr note yield down three basis points to 0.03% to a minus 0.29%.
At 9:00 the August FHFA home price index, expected to have increased 0.5%, increased just 0.3%. Yr/yr the index is up 5.5%, down frm July’s yr/yr at 5.8%. More confusion; other recent indications and reports on the housing sector have implied increasing prices, the exception has been Case/Shiller; this data lines up with recent data frm Case/Shiller’s reports. Not a market mover.
Even before the stock market opened this morning the MBS market was volatile, very early prices opened down as much as 20 bps, then in a very thinly traded market the prices jumped back to unchanged by 9:00 am. The 10 yr note, on comments frm Mario Draghi, edged closer to 2.00%, at 2.02% at 9:00. The DJIA opened +129, NASDAQ +35, S&P +14. The 10 slipped back to unchanged at 2.03%; 30 yr FNMA 3.5 coupon -2 bps frm yesterday’s close and unchanged frm 9:30 yesterday.
Two key reports at 10:00 am; Sept existing home sales up 4.7%, better than +1.0% expected. Annual sales up 8.8% yr/yr. Inventories -3.0% yr/yr, the median sales price $221,900 +6.1% yr/yr. August sales were revised slightly lower by 100K. Sept leading economic indicators were expected 0.0% as reported declined 0.2%, August indicators revised from +0.1% to 0.0%, the decline was the second this year, the other hit in Feb. LEI is a composite index of ten economic indicators that should lead overall economic activity, but recently traders have put less emphasis on it.
Stocks rallying the bond and mortgage markets flat-lining recently. Same story, we do not want to float, taking long position in the bond or mortgage markets until the 10 can break below 2.00%. We continue to believe rates will decline more but until the market actually meets our expectations we think the best approach now is to keep locked. There is little reward here but increased risk that prices could decline at these levels; we will float to begin though.
