rates are volatile

MBS  -20/32 @ 99.14      10 Yr Treasury -23/32 @ 2.7970       Dow -193 @ 15,144

 

A growing consensus that the Fed will begin to taper in the next couple of months has hurt MBS this morning. Stronger than expected Jobless Claims data provided additional confirmation that the economy is not weakening, which would be necessary for the Fed to delay tapering. Weekly Jobless Claims declined to 320K, below the consensus of 335K, and the lowest level since October 2007. July CPI matched expectations. CPI rose 0.2% from June, and was 2.0% higher than one year ago. Core CPI, which excludes food and energy, also increased 0.2%, and was 1.7% higher than one year ago. July Industrial Production was unchanged from June, which was a little weaker than expected. The Empire State index fell short of the consensus forecast. In addition, stronger than expected economic data in Europe has applied upward pressure on global interest rates. A reduction in Fed stimulus would be bad news for the stock market as well.  The Philly Fed's  index fell to 9.3 from July's 19.8 reading. Economists were expecting a smaller drop to 15.0.The numbers suggest that the pace of expansion in regional manufacturing slowed sharply, but still remained at a moderate level over the past month. The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, decreased from 19.8 (its highest reading since March 2011) to 9.3 this month. The index has now been positive for three consecutive months. The percentage of firms reporting increased activity this month (28 percent) was greater than the percentage reporting decreased activity (19 percent).

 

 

 

Top of Form Treasuries
15-Aug-13 Last Change 3-Month T-Bill 0.05% -0.01% 6-Month T-Bill 0.07% 0.00% 1-Year T-Bill 0.11% 0.01% 2-Year Note 0.35% 0.02% 3-Year Note 0.72% 0.04% 5-Year Note 1.54% 0.06% 10-Year Note 2.79% 0.07% 30-Year Bond 3.81% 0.06%

 

Top of Form Major Indices
15-Aug-13 Last Change 11th District COFI 0.954% 0.003% 1-Month LIBOR 0.180% -0.004% 6-Month LIBOR 0.395% -0.001% 12-Month LIBOR 0.668% 0.000% MTA Index 0.153% -0.006% Prime Rate 3.25% 0.00% Federal Funds Rate 0.25% 0.00% Discount Rate 0.75% 0.00%

 

Top of Form Mortgage Rates
15-Aug-13 Last Change 15-Year Fixed Freddie 3.43% 0.00% 30-Year Fixed Freddie 4.40% 0.01% 1-Year ARM Freddie 2.62% -0.02% 5/1-Year ARM Freddie 3.19% 0.01%

 

 

APOR (Changes Mondays)

30 Yr Fixed-  4.46%

15 Yr Fixed- 3.53%

5/1 ARM -      3.02%

7/1 ARM   -    3.36%

10/1-ARM -  3.89%

 

 

ECONOMIC CALENDAR

 

	Event	Actual	Cons.	Previous
Aug 12	6-Month Bill Auction	0.075%		0.075%
	3-Month Bill Auction	0.055%		0.040%
	Monthly Budget Statement (Jul)	$-97.6B	$-96.0B	$116.5B
Aug 13	NFIB Business Optimism Index (Jul)	94.1	95.4	93.5
	Import Price Index (YoY) (Jul)	1.0%	1.5%	0.2%
	Export Price Index (MoM) (Jul)	-0.1%	0.2%	-0.1%
	Export Price Index (YoY) (Jul)	0.4%		0.8%
	Import Price Index (MoM) (Jul)	0.2%	0.6%	-0.4%Revised from -0.2%
	Retail Sales (MoM) (Jul)	0.2%	0.3%	0.6%Revised from 0.4%
	Retail Sales ex Autos (MoM) (Jul)	0.5%	0.4%	0.1%Revised from 0.1%
	Redbook index (MoM) (Aug 4)	0.4%		1.0%
	Redbook index (YoY) (Aug 4)	3.7%		3.7%
	Business Inventories (Jun)	0.0%	0.2%	-0.1%Revised from 0.1%
	4-Week Bill Auction	0.055%		0.045%
	Fed's Lockhart speech
Aug 14	MBA Mortgage Applications (Aug 9)	-4.7%		0.2%
	Producer Price Index (YoY) (Jul)	2.1%	2.4%	2.5%
	Producer Price Index (MoM) (Jul)	0.0%	0.3%	0.8%
	Producer Price Index ex Food & Energy (MoM) (Jul)	0.1%	0.2%	0.2%
	Producer Price Index ex Food & Energy (YoY) (Jul)	1.2%	1.4%	1.7%
	EIA Crude Oil Stocks change (Aug 9)	-2.812M	-1.400M	-1.320M
	Fed's Bullard speech
	Fed's Bullard speech
Aug 15	Fed's Bullard speech
	Consumer Price Index (MoM) (Jul)		0.2%	0.5%
	Consumer Price Index (YoY) (Jul)		2.0%	1.8%
	Consumer Price Index Core s.a (Jul)			233.64
	Consumer Price Index Ex Food & Energy (MoM) (Jul)		0.2%	0.2%
	Consumer Price Index Ex Food & Energy (YoY) (Jul)		1.7%	1.6%
	Consumer Price Index n.s.a (MoM) (Jul)		233.67	233.50
	Initial Jobless Claims		335K	333K
	Continuing Jobless Claims (Aug 3)		3.000M	3.018M
	NY Empire State Manufacturing Index (Aug)		10.00	9.46
	Total Net TIC Flows (Jun)			$56.4B
	Net Long-Term TIC Flows (Jun)		$31.3B	$-27.2B
	Industrial Production (MoM) (Jul)		0.3%	0.3%
	Capacity Utilization (Jul)		77.9%	77.8%
	NAHB Housing Market Index (Aug)		56	57
	Philadelphia Fed Manufacturing Survey (Jul)		15.0	19.8
	EIA Natural Gas Storage change (Aug 9)		73B	96B
Aug 16	Housing Starts (MoM) (Jul)		0.900M	0.836M
	Building Permits (MoM) (Jul)		0.945M	0.911M
	Nonfarm Productivity (Q2) Preliminar		0.6%	0.5%
	Unit Labor Costs (Q2) Preliminar		1.2%	-4.3%
	Reuters/Michigan Consumer Sentiment Index (Aug) Preliminar		85.5	85.1