Market close

MBS  -17/32 @ 102.02      10 Yr T  -21/32  @ 2.8950     DOW  -105@ 14897

 

It was a volatile session unfavorable repricing was seen. MBS prices were nearly unchanged from yesterday's closing level before the release of the FOMC Minutes from the July 31 Fed meeting. The main take away from the Minutes is that Fed officials were split at the meeting about the timing for the taper to begin. Given the relatively strong performance of the economy since then, investors expect the Fed to taper in September or October, and there was nothing in the Minutes to contradict this view. The reaction in MBS markets was a swift decline followed by volatility. The Dow is down, to the lowest level in nearly two months. Tomorrow, Jobless Claims and Leading Indicators will be released.

July Existing Home Sales increased 7% from June to an annual rate of 5.39M units, above the consensus of 5.20M, and the highest level since November 2009 (when the home buyer tax credit was expiring). They were 17% higher than one year. Total inventory of existing homes available for sale rose 6% to a 5.1-month supply.