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Market Commentary

Market Commentary

January 29, 2014
10-YEAR NOTES   100-07 (+6.5) 2.724%
FN 3.5% COUPON   101-01.5 (+6)
SUPPORT   3.00%
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Today the FOMC will make their policy announcement (11:00 AM PST) and while we expect rates to remain unchanged the big issue will be LSAP reduction and any amendments to forward guidance. With the Fed keeping a close eye on the state of the economy, and the recent run of disappointing data, we could see divergence from the projected $10 billion reduction per meeting. The purchase index rose 2% vs. -4% prior and is down 12% YoY. It is likely that the recent dip in mortgage rates is fueling demand for purchases. The average rate for conforming mortgages fell 5 bps this week touching the lowest levels since November. A flatter curve has developed with 2s10s down 1 bps.

“The Committee will closely monitor incoming information on economic and financial developments in coming months and will continue its purchases of Treasury and agency mortgage-backed securities, and employ its other policy tools as appropriate, until the outlook for the labor market has improved substantially in a context of price stability.”

FOMC STATEMENT December 18, 2013.

This Week's Events :

01/29 MBA Applications 07:00

January 24

- -0.20% 4.70% -
01/29 FOMCDecision 14:00 January 29 0.25% - 0.25% -
01/29 Pace of MBSPurchases 14:00 January 30 Million - 35 Million -
01/29 Pace of TreasuryPurchases 14:00 January 35 Million - 40 Million -
01/30 Jobless Claims 08:30 January 25 330 K - 326 K -
01/30 Continuing Claims 08:30 January 18 3000 K - 3056 K -
01/30 GDP QoQ 08:30 4Q 3.20% - 4.10% -
01/30 Personal Consumption 08:30 4Q 3.70% - 2.00% -
01/30 Pending Home Sales MoM 10:00 December -0.30% - 0.20% -
01/31 Personal Income 08:30 December 0.20% - 0.20%  
01/31 Personal Spending 08:30 December 0.20% - 0.50% -


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