Register or Sign in        Email This Page     Link To This Page    
Visit MND at MBA in NYC!
33,878
# of User Comments
Micro News Archives
Use the calendar to view Micro News posts from a specific date.
Today  |  Yesterday  |  Random
Bottom Right Default
State Name: Texas
State Name underscore: Texas
State Name dash: Texas
State Name lower underscore: texas
State Name lower dash: texas
State Name lower: texas
State Abbreviation: TX
State Abbreviation Lower: tx
You are viewing Micro News from Wednesday, Dec 19, 2012 - View all recent Micro News
  • 12/19/12
    Potentially A Bit Dicey Heading Into The Close
    More of a heads-up than anything... Prevailing MBS prices during most lenders' rate-sheet creation times: 104-14 to 104-16

    Current Prices: 104-10 to 104-12

    This probably isn't cause for too much concern for most lenders, but a select few have been known to consider reprices in such situations. Things are slow, drifty, and sideways at the moment, but also a bit on the weak side of the day's range since 9AM.

    Despite a good bit of disconnection earlier, an equities sell-off into the close seems to be helping bond markets' resolve to hold their most recent support levels (1.8136 in 10yr yields or 104-10 in MBS).
    Category: MBS, UPDATE
    Share:   
  • 12/19/12
    Initially Weaker After Auction, But Not Because Of it
    MBS and Treasuries are weaker after the 7yr Note auction, but NOT because of it. The auction itself wasn't traded nearly as heavily as the 10 minutes leading up to it, or in the 10 minutes following the results. If the auction had caused the most recent pop, we would have seen the flows hit right at the 1:01:30pm release of the results. Not the case

    Causality matters less than movement, however, as we're simply noting the technical continuation of the selling trend in place since this morning's Fed "Twist" buying. Fannie 3.0s are still up 6 ticks on the day at 104-13 but dipped briefly to 104-11 just now, the lowest levels since rate sheet time. 10yr yields rose to their highest levels since the 9am hour, hitting 1.805 before falling back just under 1.80.

    These aren't major movements, but it's important to note the regularity of the persistent trend weaker since 10:30am. In terms of outright price levels, we're not into territory that justify's negative reprice risk, but for some lenders, the trend is sufficient cause for concern even if it hasn't quite delivered 4+ ticks of losses.

    Stay on guard against ongoing weakness into the afternoon. There's an outside chance that a lender or two would reprice negatively here, but those likelihoods increase if we head below 104-12 in Fannie 3.0s.
    Category: MBS, UPDATE
    Share:   
  • 12/19/12
    Post POMO Volatility Suggests Good Defensive Targets
    (quick note: "Post-POMO" has more of a ring to it than "the time frame immediately following the Fed's almost daily scheduled permanent open market operations purchasing a predetermined dollar and maturity range of US Treasuries under Operation Twist.")

    As we've noted on numerous occasions since the inception of Twist, the scheduled buying that typically concludes at 11am often times coincides with the best levels of the day for bond markets, all other things being equal. To oversimplify the dynamic: if the Fed's coming in as a guaranteed buyer of a set amount of dealer's inventories, why not push prices higher ahead of the takedown?

    This certainly isn't a hard and fast rule, but more often than not, there's at least a bit of volatility at 11:02am on POMO days, usually in a negative direction for bond prices. That's currently the case, but more so for Treasuries than MBS. Still, a bit of caution is in order, as we look to defend our nice little bounce back today.

    Fannie 3.0s were as high as 104-17 at 10:30am but quickly hit 104-11 just after 11am. The pressure is somewhat off at this point, as prices have returned to 104-15, right in line with yesterday morning's highs, but the defensive vibes are more a product of Treasury trading.

    Like MBS, Treasuries hit their best levels of the morning at 10:30am and bounced back just after 11am. This amounted to a move from 1.775 to 1.795. There was a good supportive bounce there, but the risk is that 10:30am marked the best levels of the day with a slow leak into weaker territory from here.

    Approaching that eventuality is pretty simple... Stay defensive against breaks of those recent weak spots (104-11 in Fannie 3.0s and 1.795 in 10yr yields). With those levels currently at 104-15 and 1.7857, we look to be on cruise control, but wouldn't take for granted that the rest of the day will be effortlessly bullish. Next scheduled event: 7yr Note Auction at 1pm. Minor market moving potential.
    Category: MBS, UPDATE
    Share:   
  • 12/19/12
    Bond Markets Tentatively Improved, Regardless Of Data
    The unfamiliar green glow of bond market gains has increasingly adorned the dashboard this morning though this remains a fairly recent and fairly shallow shift. After topping out at 2:20pm yesterday afternoon, 10yr yields pulled back, but never made it much below 1.82 before 5pm.

    The overnight session was initially kind, seeing relatively strong support in Asia and Europe, but "relatively" is the key word. It wasn't a pronounced snap back to lower yields as much as it was a gradual easing--fueled by opportunistic buying and short covering--down merely to 1.80, give or take.

    While Asia and Europe did no harm and caused no major waves, domestic accounts had their alarms set early to wake up and sell any overnight strength. While this was only a tactical, short-term move, it brought yields back up to 1.833 by the 8am Open. Once those tactical trading positions saw a decent amount of support pushing back at the highs, they began covering those short-term bets while those pushing back continued buying at a moderate pace as well.

    The morning's only economic data--Housing Starts--was a non-issue in all this movement, garnering effectively no response in equities or bond markets. It was simply coincidentally reported in the midst of directional market movement, but isn't remotely the source of it.

    MBS began the the session in similarly neutral territory vs yesterday's latest levels and have similarly improved in morning trading. Things were more tentative ahead of the cash open for stock markets but have added slightly to gains since then, bringing Fannie 3.0s up 5 ticks on the session to 104-13 and 10yr yields within striking distance of overnight lows at 1.800.

    Snowballs roll in both directions... All we need now is a discouraging Cliff headline to firmly reinforce the bigger picture "range boundary zone" centered on the 1.85 levels hit yesterday in 10yr yields. More on epic technical battles in The Day Ahead, if you haven't seen it yet this AM.
    Category: MBS, UPDATE
    Share:   
  • 12/19/12
    ECON: Housing Starts Weaker Than Expected, Permits Stronger
    - Housing Starts 861k vs 873k Consensus
    - Building Permits 899k vs 875k Consensus
    - Permits highest since July 2008

    The U.S. Census Bureau and the Department of Housing and Urban Development jointly announced the following new residential construction statistics for November 2012:

    BUILDING PERMITS
    Privately-owned housing units authorized by building permits in November were at a seasonally adjusted annual rate of 899,000. This is 3.6 percent (±1.1%) above the revised October rate of 868,000 and is 26.8 percent (±1.7%) above the November 2011 estimate of 709,000. Single-family authorizations in November were at a rate of 565,000; this is 0.2 percent (±0.8%)* below the revised October figure of 566,000. Authorizations of units in buildings with five units or more were at a rate of 307,000 in November.

    HOUSING STARTS
    Privately-owned housing starts in November were at a seasonally adjusted annual rate of 861,000. This is 3.0 percent (±14.3%)* below the revised October estimate of 888,000, but is 21.6 percent (±12.5%) above the November 2011 rate of 708,000. Single-family housing starts in November were at a rate of 565,000; this is 4.1 percent (±13.3%)* below the revised October figure of 589,000. The November rate for units in buildings with five units or more was 285,000.

    HOUSING COMPLETIONS
    Privately-owned housing completions in November were at a seasonally adjusted annual rate of 677,000. This is 9.7 percent (±13.7%)* below the revised October estimate of 750,000, but is 16.1 percent (±9.5%) above the November 2011 rate of 583,000. Single-family housing completions in November were at a rate of 520,000; this is 2.4 percent (±11.7%)* below the revised October rate of 533,000. The November rate for units in buildings with five units or more was 150,000.
    Category: MBS, ECON, INDUSTRY
    Share:   
  • 12/19/12
    ECON: Housing Starts Weaker Than Expected, Permits Stronger
    - Housing Starts 861k vs 873k Consensus
    - Building Permits 899k vs 875k Consensus
    - Permits highest since July 2008

    The U.S. Census Bureau and the Department of Housing and Urban Development jointly announced the following new residential construction statistics for November 2012:

    BUILDING PERMITS
    Privately-owned housing units authorized by building permits in November were at a seasonally adjusted annual rate of 899,000. This is 3.6 percent (±1.1%) above the revised October rate of 868,000 and is 26.8 percent (±1.7%) above the November 2011 estimate of 709,000. Single-family authorizations in November were at a rate of 565,000; this is 0.2 percent (±0.8%)* below the revised October figure of 566,000. Authorizations of units in buildings with five units or more were at a rate of 307,000 in November.

    HOUSING STARTS
    Privately-owned housing starts in November were at a seasonally adjusted annual rate of 861,000. This is 3.0 percent (±14.3%)* below the revised October estimate of 888,000, but is 21.6 percent (±12.5%) above the November 2011 rate of 708,000. Single-family housing starts in November were at a rate of 565,000; this is 4.1 percent (±13.3%)* below the revised October figure of 589,000. The November rate for units in buildings with five units or more was 285,000.

    HOUSING COMPLETIONS
    Privately-owned housing completions in November were at a seasonally adjusted annual rate of 677,000. This is 9.7 percent (±13.7%)* below the revised October estimate of 750,000, but is 16.1 percent (±9.5%) above the November 2011 rate of 583,000. Single-family housing completions in November were at a rate of 520,000; this is 2.4 percent (±11.7%)* below the revised October rate of 533,000. The November rate for units in buildings with five units or more was 150,000.
    Category: MBS, ECON, INDUSTRY
    Share:   
MBS Micro News updates are a service provided to MBSonMND subscribers only.
Learn More | Start a Free Trial | Open the Dashboard
  • 12/19/12
    More of a heads-up than anything... Prevailing MBS prices during most lenders' rate-sheet creation times: 104-14 to 104-16

    Current Prices: 104-10 to 104-12

    This probably isn't cause for too much concern for most lenders, but a select few have been known to consider reprices in such situations. Things are slow, drifty, and sideways at the moment, but also a bit on the weak side of the day's range since 9AM.

    Despite a good bit of disconnection earlier, an equities sell-off into the close seems to be helping bond markets' resolve to hold their most recent support levels (1.8136 in 10yr yields or 104-10 in MBS).
    Category: MBS, UPDATE
    Share:   
  • 12/19/12
    MBS and Treasuries are weaker after the 7yr Note auction, but NOT because of it. The auction itself wasn't traded nearly as heavily as the 10 minutes leading up to it, or in the 10 minutes following the results. If the auction had caused the most recent pop, we would have seen the flows hit right at the 1:01:30pm release of the results. Not the case

    Causality matters less than movement, however, as we're simply noting the technical continuation of the selling trend in place since this morning's Fed "Twist" buying. Fannie 3.0s are still up 6 ticks on the day at 104-13 but dipped briefly to 104-11 just now, the lowest levels since rate sheet time. 10yr yields rose to their highest levels since the 9am hour, hitting 1.805 before falling back just under 1.80.

    These aren't major movements, but it's important to note the regularity of the persistent trend weaker since 10:30am. In terms of outright price levels, we're not into territory that justify's negative reprice risk, but for some lenders, the trend is sufficient cause for concern even if it hasn't quite delivered 4+ ticks of losses.

    Stay on guard against ongoing weakness into the afternoon. There's an outside chance that a lender or two would reprice negatively here, but those likelihoods increase if we head below 104-12 in Fannie 3.0s.
    Category: MBS, UPDATE
    Share:   
  • 12/19/12
    (quick note: "Post-POMO" has more of a ring to it than "the time frame immediately following the Fed's almost daily scheduled permanent open market operations purchasing a predetermined dollar and maturity range of US Treasuries under Operation Twist.")

    As we've noted on numerous occasions since the inception of Twist, the scheduled buying that typically concludes at 11am often times coincides with the best levels of the day for bond markets, all other things being equal. To oversimplify the dynamic: if the Fed's coming in as a guaranteed buyer of a set amount of dealer's inventories, why not push prices higher ahead of the takedown?

    This certainly isn't a hard and fast rule, but more often than not, there's at least a bit of volatility at 11:02am on POMO days, usually in a negative direction for bond prices. That's currently the case, but more so for Treasuries than MBS. Still, a bit of caution is in order, as we look to defend our nice little bounce back today.

    Fannie 3.0s were as high as 104-17 at 10:30am but quickly hit 104-11 just after 11am. The pressure is somewhat off at this point, as prices have returned to 104-15, right in line with yesterday morning's highs, but the defensive vibes are more a product of Treasury trading.

    Like MBS, Treasuries hit their best levels of the morning at 10:30am and bounced back just after 11am. This amounted to a move from 1.775 to 1.795. There was a good supportive bounce there, but the risk is that 10:30am marked the best levels of the day with a slow leak into weaker territory from here.

    Approaching that eventuality is pretty simple... Stay defensive against breaks of those recent weak spots (104-11 in Fannie 3.0s and 1.795 in 10yr yields). With those levels currently at 104-15 and 1.7857, we look to be on cruise control, but wouldn't take for granted that the rest of the day will be effortlessly bullish. Next scheduled event: 7yr Note Auction at 1pm. Minor market moving potential.
    Category: MBS, UPDATE
    Share:   
  • 12/19/12
    The unfamiliar green glow of bond market gains has increasingly adorned the dashboard this morning though this remains a fairly recent and fairly shallow shift. After topping out at 2:20pm yesterday afternoon, 10yr yields pulled back, but never made it much below 1.82 before 5pm.

    The overnight session was initially kind, seeing relatively strong support in Asia and Europe, but "relatively" is the key word. It wasn't a pronounced snap back to lower yields as much as it was a gradual easing--fueled by opportunistic buying and short covering--down merely to 1.80, give or take.

    While Asia and Europe did no harm and caused no major waves, domestic accounts had their alarms set early to wake up and sell any overnight strength. While this was only a tactical, short-term move, it brought yields back up to 1.833 by the 8am Open. Once those tactical trading positions saw a decent amount of support pushing back at the highs, they began covering those short-term bets while those pushing back continued buying at a moderate pace as well.

    The morning's only economic data--Housing Starts--was a non-issue in all this movement, garnering effectively no response in equities or bond markets. It was simply coincidentally reported in the midst of directional market movement, but isn't remotely the source of it.

    MBS began the the session in similarly neutral territory vs yesterday's latest levels and have similarly improved in morning trading. Things were more tentative ahead of the cash open for stock markets but have added slightly to gains since then, bringing Fannie 3.0s up 5 ticks on the session to 104-13 and 10yr yields within striking distance of overnight lows at 1.800.

    Snowballs roll in both directions... All we need now is a discouraging Cliff headline to firmly reinforce the bigger picture "range boundary zone" centered on the 1.85 levels hit yesterday in 10yr yields. More on epic technical battles in The Day Ahead, if you haven't seen it yet this AM.
    Category: MBS, UPDATE
    Share:   
  • 12/19/12
    - Housing Starts 861k vs 873k Consensus
    - Building Permits 899k vs 875k Consensus
    - Permits highest since July 2008

    The U.S. Census Bureau and the Department of Housing and Urban Development jointly announced the following new residential construction statistics for November 2012:

    BUILDING PERMITS
    Privately-owned housing units authorized by building permits in November were at a seasonally adjusted annual rate of 899,000. This is 3.6 percent (±1.1%) above the revised October rate of 868,000 and is 26.8 percent (±1.7%) above the November 2011 estimate of 709,000. Single-family authorizations in November were at a rate of 565,000; this is 0.2 percent (±0.8%)* below the revised October figure of 566,000. Authorizations of units in buildings with five units or more were at a rate of 307,000 in November.

    HOUSING STARTS
    Privately-owned housing starts in November were at a seasonally adjusted annual rate of 861,000. This is 3.0 percent (±14.3%)* below the revised October estimate of 888,000, but is 21.6 percent (±12.5%) above the November 2011 rate of 708,000. Single-family housing starts in November were at a rate of 565,000; this is 4.1 percent (±13.3%)* below the revised October figure of 589,000. The November rate for units in buildings with five units or more was 285,000.

    HOUSING COMPLETIONS
    Privately-owned housing completions in November were at a seasonally adjusted annual rate of 677,000. This is 9.7 percent (±13.7%)* below the revised October estimate of 750,000, but is 16.1 percent (±9.5%) above the November 2011 rate of 583,000. Single-family housing completions in November were at a rate of 520,000; this is 2.4 percent (±11.7%)* below the revised October rate of 533,000. The November rate for units in buildings with five units or more was 150,000.
    Category: MBS, ECON, INDUSTRY
    Share:   
  • 12/19/12
    ECON: Housing Starts Weaker Than Expected, Permits Stronger
    - Housing Starts 861k vs 873k Consensus
    - Building Permits 899k vs 875k Consensus
    - Permits highest since July 2008

    The U.S. Census Bureau and the Department of Housing and Urban Development jointly announced the following new residential construction statistics for November 2012:

    BUILDING PERMITS
    Privately-owned housing units authorized by building permits in November were at a seasonally adjusted annual rate of 899,000. This is 3.6 percent (±1.1%) above the revised October rate of 868,000 and is 26.8 percent (±1.7%) above the November 2011 estimate of 709,000. Single-family authorizations in November were at a rate of 565,000; this is 0.2 percent (±0.8%)* below the revised October figure of 566,000. Authorizations of units in buildings with five units or more were at a rate of 307,000 in November.

    HOUSING STARTS
    Privately-owned housing starts in November were at a seasonally adjusted annual rate of 861,000. This is 3.0 percent (±14.3%)* below the revised October estimate of 888,000, but is 21.6 percent (±12.5%) above the November 2011 rate of 708,000. Single-family housing starts in November were at a rate of 565,000; this is 4.1 percent (±13.3%)* below the revised October figure of 589,000. The November rate for units in buildings with five units or more was 285,000.

    HOUSING COMPLETIONS
    Privately-owned housing completions in November were at a seasonally adjusted annual rate of 677,000. This is 9.7 percent (±13.7%)* below the revised October estimate of 750,000, but is 16.1 percent (±9.5%) above the November 2011 rate of 583,000. Single-family housing completions in November were at a rate of 520,000; this is 2.4 percent (±11.7%)* below the revised October rate of 533,000. The November rate for units in buildings with five units or more was 150,000.
    Category: MBS, ECON, INDUSTRY
    Share:   
 
No Micro News Posts Here.

Options:
 
 
No Micro News Posts Here.

Options:
 
Did you know?
You can see a list of all comments on MND by clicking the 'Read the Latest Comments' option under the 'Community' menu.
 

More From MND

Mortgage Rates:
  • 30 Yr FRM 3.37%
  • |
  • 15 Yr FRM 3.50%
  • |
  • Jumbo 30 Year Fixed 4.50%
MBS Prices:
  • 30YR FNMA 4.5 107-21 (0-03)
  • |
  • 30YR FNMA 5.0 108-02 (0-26)
  • |
  • 30YR FNMA 5.5 109-19 (0-00)
Recent Housing Data:
  • Mortgage Apps 15.13%
  • |
  • Refinance Index 25.99%
  • |
  • Purchase Index -2.67%