Today brings about some modest recovery after the market close yesterday to honor all of our active duty and Veterans. Jobless claims, both initial and continuing, came in above expectations (no shocker) and the overall state of our economy is still very fragile. Yet we hear chatter regarding raising rates?
First let me tell you if they do it will not affect much as 70%+ of traders already expect this and as such its priced into our market already (why the FNMA coupon is down nearly 200bps in the last 2-3weeks.
Second - If you want to look at a broader scope the bigger issue is the fact that Israel just launched an air attack against Syria. This is already being touted as a potential start to WW3?
Regardless of the outcome its definitely not good news and I pray for that part of the world as living in conflict like that for that long is horrible.
The potential is rates are likely to see some improvement from this conflict as fear drives into the marketplace.
Currently the FNMA 3.0 is now at 99.75 (up 13bps from Tuesday close).
Here is today's data...
Initial Jobless Claims were unchanged last week holding below 300K for the 36th consecutive week. Initial Jobless Claims posted just above market expectations at 276K (consensus 270K). The persistence below 300K is in line with a labor market that continues to move closer to full employment. The four-week moving average for Claims rose to 267,750 vs. 262,750 prior. Continuing Claims rose 5K to 2174K vs. 2169K prior (revised). Later today we get the Monthly Budget Statement which is expected to show a monthly deficit of $131.5 B. Treasuries are higher this morning following yesterday’s market close.