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Mortgage News Daily combines the expertise of some of the housing industry's leading minds with the power of social media to offer an always lively, constantly evolving web community. MND communicates breaking news, streams video, and provides expert opinion and commentary to a community of interested market professionals and curious consumers.MBS MORNING: MBS Improving vs. Treasuries
As the noon hour approaches, MBS are up on the day with the 4.5 up 2 ticks to 101-27. Meanwhile, treasuries are still down on the day with the 10yr off 4 ticks, bringing the yield up to 3.381. Without support from some positive price movement in tsy's, MBS may have a tough time moving much higher. On the two day chart, we can see MBS struggle with 101-28 despite tsy yields being slightly lower than this AM:
[Image or graph removed from email. View full article with images]
There are a couple disturbing developments in tsys that suggest they may have a tough time of their own with important technical levels. Well, at least they've had a tough time so far today in terms of the 3.38 inflection point in 10yr yields. 3.38 served as almost perfect support all week in addition to it acting as a noticeably inflection point for months. But with the slightly higher yields this AM, 10yr's basically opened above 3.38 and upon their 11AM improvements, encountered 3.38 once again, but this time, as resistance to further improvement, with a noticeable bounce right on the mark.
[Image or graph removed from email. View full article with images]
Combine this with what we already witnessed last week in 10yr futures inability to crest the perennial high water mark at 119-29 and bonds now have the burden of proof when it comes to convincing markets they can continue improving.
[Image or graph removed from email. View full article with images]
That's not to say they can't make a case to improve, but that until futures break 119-29, a level that coincides with 3.31--last week's resistance for yields--even an intraday improvement down past 3.38 would merely constitute a return to the range with not organic reason for bullishness. Among the favorite inorganic contributors to tsy sentiment, though not something that should be relied upon, is potential stock market fizzle.
Though the S&P is above the important 1100 level this AM, the next layer of resistance that emerged last week at 1113--multi month highs--continues to hold. As long as it does, at the very least, it constitutes the absence of a potential negative for bonds.
[Image or graph removed from email. View full article with images]
Data Recap
- Existing Home Sales Top Estimates : 6.1m vs. 5.57 previous and 5.7 consensus
- 2 yr note auction YET TO COME at 1pm. Doesn't not speak in huge measure to rate sheet influential MBS, but the shape of the yield curve will take every little bit of info it can get!
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This email was sent to you by:
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Mortgage News Daily
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Message:
YOUR MESSAGE HERE
MBS MORNING: MBS Improving vs. Treasuries
As the noon hour approaches, MBS are up on the day with the 4.5 up 2 ticks to 101-27. Meanwhile, treasuries are still down on the day with the 10yr off 4 ticks, bringing the yield up to 3.381. Without support from some positive price movement in tsy's, MBS may have a tough time moving much higher. On the two day chart, we can see MBS struggle with 101-28 despite tsy yields being slightly lower than this AM:
There are a couple disturbing developments in tsys that suggest they may have a tough time of their own with important technical levels. Well, at least they've had a tough time so far today in terms of the 3.38 inflection point in 10yr yields. 3.38 served as almost perfect support all week in addition to it acting as a noticeably inflection point for months. But with the slightly higher yields this AM, 10yr's basically opened above 3.38 and upon their 11AM improvements, encountered 3.38 once again, but this time, as resistance to further improvement, with a noticeable bounce right on the mark.
Combine this with what we already witnessed last week in 10yr futures inability to crest the perennial high water mark at 119-29 and bonds now have the burden of proof when it comes to convincing markets they can continue improving.
That's not to say they can't make a case to improve, but that until futures break 119-29, a level that coincides with 3.31--last week's resistance for yields--even an intraday improvement down past 3.38 would merely constitute a return to the range with not organic reason for bullishness. Among the favorite inorganic contributors to tsy sentiment, though not something that should be relied upon, is potential stock market fizzle.
Though the S&P is above the important 1100 level this AM, the next layer of resistance that emerged last week at 1113--multi month highs--continues to hold. As long as it does, at the very least, it constitutes the absence of a potential negative for bonds.
Data Recap
- Existing Home Sales Top Estimates : 6.1m vs. 5.57 previous and 5.7 consensus
- 2 yr note auction YET TO COME at 1pm. Doesn't not speak in huge measure to rate sheet influential MBS, but the shape of the yield curve will take every little bit of info it can get!
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