Register or Sign in        Email This Page     Link To This Page    
Visit MND at MBA in NYC!
2,000,000
# of Visitors Per Month
 

Send Article via Email

REGISTERED USERS (Free!):
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 4 and 4 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:
Harry Chriest |
Mortgage News Daily

Message:   YOUR MESSAGE HERE
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 Bounce Back After Losing Ground on 830am Data Glut
Posted to: Micro News
Thursday, May 15, 2014 9:04 AM

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

The first two sentences of the day ahead are:

Today is by far and away the busiest day of economic data this week.  This presents a good opportunity to feel out what's important to the bond market.

We already have the answer.  Markets made it blatantly obvious right off the bat.  All three economic reports pointed to higher rates this morning, and indeed, the first move was a quick, moderate move into weaker territory.  But just as quickly, we're back into positive territory.  What's up with that?!  If we're only looking at the econ data and US trading levels, it makes no sense.

Things begin making more sense when we look at European trading levels, especially in core debt markets like Germany and The UK.  While Treasuries had their mini selling spree, European debt refused to follow, ultimately heading for the lowest yields of the year and bringing US Treasuries along for the ride.

The suggestion is that the momentum trade--the 'flavor of the month,' if you will--is default strength for bond markets led by Europe, mostly in anticipation of some form of quantitative easing and rate cuts at the June meeting.  Geopolitical risk could be a supporting actor for European bond market strength as well.

Whatever the case, global bond market momentum is more important to US Treasuries than this morning's strong data.  MBS are just along for the ride (i.e. global sovereign debt trading is setting the tone and MBS are following as they normally do).

Here's a rundown of the data:

Jobless Claims

  • 297k vs 320k forecast, lowest since May 2007
  • continued claims 2.667 mln vs 2.693 mln forecast

Consumer Price Index (CPI)

  • +0.3 vs +0.3 forecast
  • Excluding food/energy, +0.2 vs +0.1 forecast

Empire State Manufacturing

  • +19.01 vs +5.0 forecast
  • Employment Index +20.88 vs +8.16 previously
  • New Orders +10.44 vs -2.77 previously

Treasuries are currently split, with 2-7yr maturities slightly weaker and 10/30yr maturities slightly stronger.  MBS are 1 tick higher on the day in Fannie 3.5 and 4.0.  The move into positive territory basically leveled-off and headed back toward unchanged levels (which is still amazing given the economic data above).




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 4.01%
  • |
  • 15 Yr FRM 3.18%
  • |
  • Jumbo 30 Year Fixed 3.90%
MBS Prices:
  • 30YR FNMA 4.5 108-10 (-0-02)
  • |
  • 30YR FNMA 5.0 110-20 (-0-00)
  • |
  • 30YR FNMA 5.5 111-19 (0-01)
Recent Housing Data:
  • Mortgage Apps 11.56%
  • |
  • Refinance Index 23.29%
  • |
  • FHFA Home Price Index 0.67%