| Market Comment
Mortgage bond prices finished the week near unchanged holding rates steady. Data was mixed throughout the week. The Institute for Supply Management (ISM) report printed at 51.9 which was near expectations. Rates shot higher Tuesday ahead of the Fed meeting Wednesday despite no anticipated rate increase. The Fed kept rates unchanged. The governing body said the labor market continued to strengthen, economic activity picked up from the first half of the year, and inflation increased however it was still below the Committee’s 2 percent longer-run objective. The ADP payrolls report printed at 147K. Traders expected ADP to show 165K jobs. Payrolls increase 161K versus the expected 175K increase. Mortgage interest rates finished the week lower by approximately 1/8 of a discount point.
LOOKING AHEAD
Economic
Indicator |
Release
Date & Time |
Consensus
Estimate |
Analysis |
| Consumer Credit |
Monday, Nov. 7,
3:00 pm, et |
$22B |
Low importance. A significantly large increase may lead to lower mortgage interest rates. |
| 3-year Treasury Note Auction |
Tuesday, Nov. 8,
1:15 pm, et |
None |
Important. Notes will be auctioned. Strong demand may lead to lower mortgage rates. |
| 10-year Treasury Note Auction |
Wednesday, Nov. 9,
1:15 pm, et |
None |
Important. Notes will be auctioned. Strong demand may lead to lower mortgage rates. |
| Weekly Jobless Claims |
Thursday, Nov. 10,
8:30 am, et |
256K |
Important. An indication of employment. Higher claims may result in lower rates. |
| 30-year Treasury Bond Auction |
Thursday, Nov. 10,
1:15 pm, et |
None |
Important. Bonds will be auctioned. Strong demand may lead to lower mortgage rates. |
| U of Michigan Consumer Sentiment |
Friday, Nov. 11,
10:00 am, et |
88 |
Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates. |
Fed MBS Reinvestment
The Fed continues to spend billions of dollars monthly in order to keep mortgage interest rates low and help the housing market.
In order to ensure the transparency of its agency mortgage-backed securities transactions, the Open Market Trading Desk at the New York Fed publishes historical operational results. Operational results include agency MBS transactions associated with additional asset purchases and reinvestment of principal payments from agency debt and agency MBS in agency MBS, as directed at times by the Federal Open Market Committee (FOMC), as well transactions associated with small value exercises.
From October 14 to November 10 the Fed planned to purchase approximately $42 billion in its reinvestment purchase operations over the noted monthly period. The prior 2 periods the Fed spent $44 billion and $31 billion respectively. The next release of tentative reinvestment purchase amounts in agency MBS will be at 3 p.m. on November 10, 2016. The amounts published are based on already announced FOMC decisions, and make no assumptions about future policy actions. Accordingly, if the FOMC announced a modification to its policy stance with a new policy directive, they would release an updated statement regarding MBS purchases (source: The Federal Reserve Bank of New York.)
Now is a great time to take advantage of the historically favorable mortgage interest rates the Fed has helped to lower.
Copyright 2016. All Rights Reserved. Mortgage Market Information Services, Inc. www.ratelink.com The information contained herein is believed to be accurate, however no representation or warranties are written or implied.
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