Register or Sign in        Email This Page     Link To This Page    
Visit MND at MBA in NYC!
# of User Comments

Send Article via Email

Can forward to 6 email addresses at a time. Register or Login

Registered users also get the additional advantage of Co-branded Emails and Landing Pages. Learn more about these features.

Your Name: 
Your Email: 
I want to forward this to
(Enter Email Address Below) :
Include a Personal Message (optional)

Please add 1 and 8 and type the answer here:
Leave this field blank.
Email Preview Below:
This feature is now 100% free. Learn More About Co-branded Email and our other Co-branded Services.
This email was sent to you by:
Anonymous |
Mortgage News Daily

Email alerts, such as this one, are a free service provided by Mortgage News Daily. If you would like to receive an alert when important news breaks please register to join our community.
Bond Markets Weaker, But Not Because of China
Posted to: Micro News
Wednesday, February 12, 2014 9:32 AM

Forward this email:  Send a copy of this story to someone you know that may want to read it.

There was stronger economic data in China overnight.  Unfortunately when it comes to interest rate news, Chinese economic data gets way too much credit.  It was not a market mover last night as Treasuries merely drifted sideways to slightly higher.  Chinese equities indices rose handsomely, but none of it translated to other markets.  Even the Nikkei fell into negative territory.

A far bigger impact was felt from the reaction to UK inflation data (from their central bank).  The data pointed toward lower inflation, which would normally be good for rates.  But because this report is also an opportunity for the Bank of England to signal more accommodation to prevent disinflation, and because the Bank of England did no such thing, bond markets were none too happy.  Moments after improving due to lousy Eurozone Industrial Production data, European bond markets turned around and went higher in yield, pulling US Treasuries along for the ride.

More than a runaway sell-off, the late overnight events made for slight weakness and increased volatility.  It's left 10yr yields another 3.3bps higher this morning, now at the critical 2.75 level.  Perhaps there's some extra hesitation before today's 10yr auction, but not only won't we know until 1pm, we'd still be waiting for tomorrow's 30yr auction before seeing any sort of 'relief bid' in bond markets due to the auction cycle being over (a week of Treasury auctions brings extra supply to the supply/demand equation.  Markets know it's coming, but it's still thought to have a temporary upward effect on rates as traders make sure they leave enough room in portfolios to accommodate the supply).

The translation to MBS has been minimal, with Fannie 4.0s down only 3 ticks so far.  That is AFTER last night's roll, which made prices another 11 ticks lower yesterday after the close.  That 11 tick drop has no effect on pricing.

More from MND:


If you would like to opt-out of receiving email forwards from this person please click here to remove your email address.

Forward this email:  Send a copy of this story to someone you know that may want to read it.


More From MND

Mortgage Rates:
  • 30 Yr FRM 3.67%
  • |
  • 15 Yr FRM 2.95%
  • |
  • Jumbo 30 Year Fixed 3.62%
MBS Prices:
  • 30YR FNMA 4.5 108-28 (0-00)
  • |
  • 30YR FNMA 5.0 110-17 (-0-04)
  • |
  • 30YR FNMA 5.5 111-30 (0-02)
Recent Housing Data:
  • Mortgage Apps 10.03%
  • |
  • Refinance Index 11.33%
  • |
  • Purchase Index 8.43%