Headlines

MBS CLOSE: Ticked Up A Bit After Hours

Published: Thu, Jul 2 2009 5:16 PM by Matthew Graham (MBS Commentary)

closing post for NFP thursday before the 4th of july weekend. 5.0's ticked up a bid after the book close, 4.5's ticked down. the 10yr went sideways a mere 3/1000's off 3.5 even. Likewise, 4.5's and 5.0's are both within a tick of 100-00 on 102-00 respectively. Talk about technical gravity! ...

MBS AFTERNOON: AFTER HOURS ALERT (KINDA)

Published: Thu, Jul 2 2009 3:06 PM by Adam Quinones (MBS Commentary)

After reaching an intraday high of 102-06, the FN 5.0 has moved back to its long standing resistance 102-00 price level. Meanwhile, the other "rate sheet influential" MBS coupon, the FN 4.5, which we are still not willing to award the current coupon title belt...is feeling the gravitational forces of "parnertia" pulling on prices....

MBS LUNCH: Not Much To Report...

Published: Thu, Jul 2 2009 1:22 PM by Matthew Graham (MBS Commentary)

On Thursday July 2nd, following the release of weaker than expected NFP, MBS continue to rally in a relatively stable pattern. Tsy's are following a similar pattern but are certainly outperforming, thus causing massive spread widening. This could be a good sign for next week, but a potential short covering rally in stocks is a risk suggested by technical levels in s and p ...

Mortgage Rates Tick Lower After Jobs Data

Published: Thu, Jul 2 2009 12:13 PM by Victor Burek (Mortgage Rate Watch)

Price of mortgage-backed securities progressively moved higher as the day wore on yesterday, after all was said and done loses from the prior day were recovered. The improvement in price allowed most lenders to reprice for the better by day’s end. Helping fuel the turnaround was the stock market moving off its highs of the day and benchmark treasury yields moving lower. The 10yr Treasury note closing at a yield of 3.54 after hitting 3.60 earlier in the day. Most of the fluctuations in financial markets appeared to traders setting themselves up for today: the biggest impacting report of the month, the Employment Situation report. ...

Mid-Day Recap: Labor Reports Send Markets into Freefall

Published: Thu, Jul 2 2009 11:23 AM (Top News)

The pace of losses in the labor market had been moderating for four months but in June nearly half a million jobs vanished from the economy, in contract to widespread expectations. The Bureau of Labor Statistics said 467,000 jobs were lost, pushing the unemployment rate to 9.5%, the highest in 26 years. “The heavy loss of jobs in June is a warning that the road to recovery will be bumpy, but doesn't yet indicate that we have gone off the track” . . . ...

MBS MORNING: Big Picture Unknowns Still Limiting MBS Gains

Published: Thu, Jul 2 2009 10:16 AM by Adam Quinones (MBS Commentary)

The MBS trading environment remains defensive. Market participants still broadly prefer to avoid extension risk heavy "down in coupon" strategies as there are far better, shorter lived "up in coupon" positions that can be taken (minimal prepay risk in the mortgage market right now)...leaving the Federal Reserve alone to fight off originators and servicer selling. This is a function of high volatility in the trading environment, or more simply, the fact that the BIG PICTURE is still very unclear which is forcing investors to stay away from current coupon MBS. ...

June Employment Data Worse than Expected: 467k Jobs Lost. 9.5% Unemployment Rate

Published: Thu, Jul 2 2009 9:10 AM by Patrick McGee (Fed and Economy Watch)

Forecasts were much too optimistic for the June employment numbers. The labor market lost 467,000 jobs last month, pushing the unemployment rate up one-tenth to 9.5%, its highest level in 26 years. Analysts had been looking for just 325,000 lost jobs....

MBS OPEN: NFP IN! -467k. Previous Revised Down as Well!.

Published: Thu, Jul 2 2009 8:28 AM by Matthew Graham (MBS Commentary)

MBS OPEN: NFP IN! -467k. Previous Revised Down as Well!. MBS and tsy's react by initially improving. 10 yr heading to 3.5./ MBS up 4-5 ticks. Jobless claims also out worse than expected..................................................................

The Day Ahead: Markets Hesitant Ahead of Employment Data

Published: Thu, Jul 2 2009 8:16 AM (Top News)

Markets are edging lower ahead of the 8:30 release of Nonfarm Payrolls. A lot is hanging on this report as many forecasts for the economy are dependent on the direction of the labor market. Many look for signs of stabilization after last month’s downside surprise, but signs of a recovery have been far from evident in the weekly Jobless Claims numbers or the ADP private employment report. The consensus looks for 325,000 jobs to have vanished this month, with forecasts ranging between 225,000 and 435,00...

HARP Guidelines Allow for 125% LTV. Originators Still Skeptical

Published: Wed, Jul 1 2009 5:52 PM (Top News)

The Home Affordable Refinance Program was designed to assist borrowers who have demonstrated an acceptable payment history on their existing Fannie Mae or Freddie Mac owned mortgage loan. Unfortunately due to rising unemployment levels and increasing foreclosure rates, demand for housing has weakened and property values have continued to decline, which has blocked many borrowers from utilizing HARP....

MBS CLOSE: What Dreams May Come?

Published: Wed, Jul 1 2009 5:28 PM by Matthew Graham (MBS Commentary)

Preparing for NFP on 7/1/09 The market has been in a relatively sidways pattern since the much anticipated FOMC statement which helped continue to calm a market panicked over duration. Tomorrow's NFP is "the next big thing." In this post we reiterate our previous stance of remaining extremely defensive in the face of such potentially market-moving data. Anything Can Happen!...

MBS AFTERNOON: Range Widens (For The Better...)

Published: Wed, Jul 1 2009 3:19 PM by Matthew Graham (MBS Commentary)

After a relatively sidways early afternoon, MBS and tsy's are improved, both at their best levels of the day. Again, almost all of the directionality today can be chalked up to a dress rehearsal before tomorrow's NFP and inception of a 3 day weekend...

Mortgage Performance: Fighting Rising Rate of Foreclosures with Loan Modifications

Published: Wed, Jul 1 2009 1:26 PM (Top News)

A joint report from the OCC and OTS, which includes 64% of all outstanding mortgages, shows that instances of delinquency continued to increase in the second quarter. Particularly of note is the increasing growth rate of delinquencies among loans backed...

MBS LUNCH: Encountering All Manner Of Resistance

Published: Wed, Jul 1 2009 1:14 PM by Matthew Graham (MBS Commentary)

Resistance abounds.... Yesterday and today, the 5.0 encountered a floor around 101-17 to 101-18 Thus far, 5.0's unable to crack a ceiling at 101-24 (1 tick up on the day at least!) 10UST wasn't willing to crack 3.6, despite numerous tries, but...

Mid-Day Recap: Markets Begin Q3 Cautiously Optimistic

Published: Wed, Jul 1 2009 12:13 PM by Patrick McGee (Fed and Economy Watch)

Markets were optimistic before the opening bell, and despite poor omens for the June employment report, positive data in real estate and manufacturing has helped stocks trade higher in the early hours....

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