Congress passed a bill to raise the U.S. debt ceiling and end the partial government shutdown. While President Obama signed the short-term bill early Thursday morning, the deal will have to be revisited three months from now.
Friday was a quiet day for the Bond Market with no Fed speakers or economic news released. Overnight Treasuries snapped a three-day gain before the delayed Jobs Report is released tomorrow.
Yesterday, the market rallied yet again with the government finally reaching a short-term deal to end the shutdown. Short-term lending rates quickly improved, causing a sustained spike in the MBS market as well.
President Obama signed a deal late last night to end the partial government shutdown. The market recovered all morning losses causing a re-price for the better.
Rumors are circulating through the news that an agreement to end the government shutdown and a possible debt ceiling rise, ending the current stalemate crisis that is affecting millions of Americans. I hope the rumors are true, but I’m not holding my breath.
Mortgage rates increased slightly yesterday as hesitant investors wait for news regarding the government shutdown. Trading volumes are 75% of the 30-day moving average showing the direct impact the political uncertainty has on the MBS market.
Treasuries futures soared on headlines about a tentative deal; but the MBS market was closed. Investors are pining for economic data, but have to settle for the political soap opera.
Mortgage rates remained flat Friday. The market saw more volatility than the previous week, however any potential long term moves hinge on the government reopening for business. Investors are eager to see the employment report compiled prior to the shutdown, however it still has not been released. Thursday is the big news day with Jobless Claims and the Philadelphia Fed Survey still scheduled to be released.
It was a rough start in the morning yesterday but a rally in the afternoon helped turn us in the right direction. The turnaround was caused by a better than expected 30-year treasury auction as well as public comments by multiple Fed officials stating they did not expect any taper of the QE program before the end of the year.
Finding new and interesting stories for This Week in Financial Blunders has been a bit of a challenge over the past week or so. Why’s that? Well it’s because the only thing being covered on American news outlets has been the government shutdown, and rightfully so. It’s one of the biggest, if not the biggest, stories of the year and it has potential to affect the entire global economy. That’s why this week’s stories of monetary mishaps are all caused by the shutdown. The phrase “read ‘em and weep” has never rung so true.