Realist Real Estate Roundup, November 11–15

Bonds rally slightly on a light data week and Yellen’s testimony

Why follow the weekly Realist Real Estate Roundup?

The roundup is a weekly series in which we discuss the week’s trading in government bonds and TBA (To-Be-Announced) mortgage-backed securities. We’ll see where mortgage rates have been and we’ll go over the weekly economic data and earnings announcements. Then we’ll look forward to what’s coming up the following week. The information in this series will be relevant to mortgage REITs like American Capital Agency (AGNC), Annaly (NLY), Hatteras (HTS), Capstead (CMO), and MFA Financial (MFA) as well as people who invest in homebuilders.

10 year bond yield - LTEnlarge Graph

Bonds rally slightly on lack of data and Yellen’s testimony

Last week was relatively data-light, with no market-moving reports. On Monday, the bond market was closed for the Veteran’s Day holiday. We really didn’t have much in the way of important data until Thursday, when we got some manufacturing reports.

Janet Yellen appeared in front of the Senate Banking Committee on Thursday and gave us her views on monetary policy. She is a dove, as people already know, and she appears to be in no rush to end quantitative easing any time soon. Bonds didn’t really react all that much, although she certainly didn’t say anything that was all that different than what Ben Bernanke has been saying. You can find a more complete discussion of Yellen’s testimony and analysis here.

In the next parts of this series, we’ll look at trading in the TBA market (which is the basis for mortgage rates), see where mortgage rates have been for the week, and then discuss past and upcoming economic data.

The Realist Discussions