Economic Hope Squares Off Against Virus Fears (Again)

Markets continue trying to sort out the prospects for a recovery vs the risk of covid-19 resurgence. Today’s battle was between super strong Retail Sales data and disconcerting covid headlines for a few US states as well as Beijing. 

Econ Data / Events

  • 11:30-11:50 AM (ET) – Fed 30yr UMBS Buying  

  • Retail Sales:+17.7 vs +8.0 f’cast, -14.7 prev

  • NAHB Builder Confidence: 58 vs 45 f’cast, 37 prev

  • Industrial Production: +1.4 vs +2.9 f’cast, -12.5 prev

Market Movement Recap

07:53 AM

Stocks and bond yields higher overnight.  Follow-through trading on yesterday’s corporate bond buying announcement from Fed.  Also, talk of $1 trillion infrastructure bill.  10yr yield up 3bps to start the day (.75%).

08:43 AM

Stocks surging and bond yields rising on super strong Retail Sales data.  MBS look like they’re still asleep with no discernible reaction so far.

10:32 AM

Stronger NAHB may not have helped, but markets focused more on Powell saying “near a bottom” and “beginning the 2nd phase of the re-opening.”  Yields at the highs.  MBS near lows.

10:50 AM

Losses reversed course on a variety of COVID-related headlines, although Powell was also saying more sobering things about the economy around the same time.

02:19 PM

Uneventful afternoon so far with bonds sideways at slightly weaker levels, but well inside the highs/lows discussed in the past 2 updates.

MBS Pricing Snapshot

Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.

MBS

UMBS 2.0

101-26 : -0-04
Treasuries

10 YR

0.7500 : +0.0480
Pricing as of 6/16/20 3:56PMEST

Today’s Reprice Alerts and Updates

10:50AM  :  Losses Reverse Course; MBS at Today’s Highs

10:32AM  :  ALERT ISSUED: Bonds Losing Ground as Powell Speaks and After Strong Builder Data

8:41AM  :  Retail Sales Crushes Forecast; Markets Responding

Economic Calendar

Time Event Period Actual Forecast Prior
Tuesday, Jun 16
8:30 Retail Sales (%)* May 17.7 8.0 -16.4
9:15 Industrial Production (%) May 1.4 2.9 -11.2
10:00 Business Inventories (% ) Apr -1.3 -0.8 -0.2
10:00 NAHB housing market indx Jun 58 45 37
Wednesday, Jun 17
7:00 MBA Purchase Index w/e 311.7
7:00 Mortgage Refinance Index w/e 3529.0
8:30 House starts mm: change (%) May -30.2
8:30 Build permits: change mm (%) May -21.4
8:30 Building permits: number (ml) May 1.228 1.066
8:30 Housing starts number mm (ml) May 1.095 0.891

By Matthew Graham , dated 2020-06-16 15:58:56

Source link

Courtesy of Mortgage News Daily

Leave a Reply