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You are viewing Micro News from Wednesday, Dec 4, 2013 - View all recent Micro News
  • 12/4/13
    Drifting Sideways, Holding Near Highs After Hours
    Fannie 4.0s are right in line with the prices seen immediately following this morning's weaker-than-expected ISM data (103-16). They've held between there and 103-13 ever since. If anything, they're erring toward the highs as we work our way through after hours for bond markets (3pm-5pm).

    That strength is more a factor of their relative outperformance of a more decidedly flat/neutral Treasury complex. 10's aren't nearly as close to their best post-10am levels. In other words, after nearly two weeks of MBS getting trounced by Treasuries, we have a bit of a correction over the past 5 and a half hours. Not much else to it, and certainly nothing significant, though the stability has afforded a few lenders the opportunity to reprice positively.
    Category: MBS, UPDATE
    Share:   
  • 12/4/13
    New Home Sales Stronger Than Expected
    - New Home Sales 444k vs 428 forecast, 354k previously
    - Single Family Sales +25.4 pct, biggest rise since 1980
    - Median prices $245.8k, down 0.6 pct year over year

    Market Reaction: Taken in and of itself, this would have a negative impact on MBS prices, but the ISM data out at the same time is a more potent market mover. As such, bond markets are slightly improved since 10am, but this New Home Sales data has likely limited the positive bounce.

    Sales of new single-family houses in October 2013 were at a seasonally adjusted annual rate of 444,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 25.4 percent (±19.2%) above the revised September rate of 354,000 and is 21.6 percent (±15.6%) above the October 2012 estimate of 365,000.

    The median sales price of new houses sold in October 2013 was $245,800; the average sales price was $321,700. The seasonally adjusted estimate of new houses for sale at the end of October was 183,000. This represents a supply of 4.9 months at the current sales rate.
    Category: MBS, ECON
    Share:   
  • 12/4/13
    ECON: ISM Non-Manufacturing Weaker Than Expected
    - ISM Services PMI 53.9 vs 55.0 forecast, 55.4 previously
    - Employment 52.6 vs 56.2 previously
    - Employment lowest since May

    - Market Reaction: helping to stem the losses inspired by this morning's ADP data, though it's only been worth 2bps in terms of 10yr yields so far and 7 ticks for Fannie 4.0s.

    "This indicates continued growth at a slower rate in the non-manufacturing sector. The Non-Manufacturing Business Activity Index decreased to 55.5 percent, which is 4.2 percentage points lower than the 59.7 percent reported in October, reflecting growth for the 52nd consecutive month, but at a slower rate. The New Orders Index decreased slightly by 0.4 percentage point to 56.4 percent, and the Employment Index decreased 3.7 percentage points to 52.5 percent, indicating growth in employment for the 16th consecutive month, but at a slower rate. The Prices Index decreased 3.9 percentage points to 52.2 percent, indicating prices increased at a slower rate in November when compared to October. According to the NMI®, 11 non-manufacturing industries reported growth in November. Respondents' comments for the most part indicate the non-manufacturing sector is maintaining a steady course of incremental growth and a positive outlook for the upcoming months."
    Category: MBS, ECON
    Share:   
  • 12/4/13
    Bond Markets Reeling After ADP Data; Waiting on ISM
    Overnight volatility was minimal with 10yr yields holding under 2.81 until the start of the domestic session. The ADP Employment figures hit at 8:15am coming in at 215k payrolls vs a forecast of 173k. Bond markets immediately sold off and have only leaked lower since then.

    Fannie 3.5s are off the radar now and we'll be switching to follow 4.0s today (down 18 ticks to 99-22). Fannie 4.0s are down 17 ticks at 103-10. 10yr yields are up more than 7 ticks at 2.8479. S&Ps are off 10 points but did most of their selling before the data.

    There's more to come as well. ISM Non-Manufacturing is an important report coming up at 10am and can have a big impact. If it's similarly stronger than expected, MBS could continue lower. If it's weaker, it could mark the point at which we level off for the day.
    Category: MBS, UPDATE
    Share:   
 
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  • 12/4/13
    Fannie 4.0s are right in line with the prices seen immediately following this morning's weaker-than-expected ISM data (103-16). They've held between there and 103-13 ever since. If anything, they're erring toward the highs as we work our way through after hours for bond markets (3pm-5pm).

    That strength is more a factor of their relative outperformance of a more decidedly flat/neutral Treasury complex. 10's aren't nearly as close to their best post-10am levels. In other words, after nearly two weeks of MBS getting trounced by Treasuries, we have a bit of a correction over the past 5 and a half hours. Not much else to it, and certainly nothing significant, though the stability has afforded a few lenders the opportunity to reprice positively.
    Category: MBS, UPDATE
    Share:   
  • 12/4/13
    - New Home Sales 444k vs 428 forecast, 354k previously
    - Single Family Sales +25.4 pct, biggest rise since 1980
    - Median prices $245.8k, down 0.6 pct year over year

    Market Reaction: Taken in and of itself, this would have a negative impact on MBS prices, but the ISM data out at the same time is a more potent market mover. As such, bond markets are slightly improved since 10am, but this New Home Sales data has likely limited the positive bounce.

    Sales of new single-family houses in October 2013 were at a seasonally adjusted annual rate of 444,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 25.4 percent (±19.2%) above the revised September rate of 354,000 and is 21.6 percent (±15.6%) above the October 2012 estimate of 365,000.

    The median sales price of new houses sold in October 2013 was $245,800; the average sales price was $321,700. The seasonally adjusted estimate of new houses for sale at the end of October was 183,000. This represents a supply of 4.9 months at the current sales rate.
    Category: MBS, ECON
    Share:   
  • 12/4/13
    - ISM Services PMI 53.9 vs 55.0 forecast, 55.4 previously
    - Employment 52.6 vs 56.2 previously
    - Employment lowest since May

    - Market Reaction: helping to stem the losses inspired by this morning's ADP data, though it's only been worth 2bps in terms of 10yr yields so far and 7 ticks for Fannie 4.0s.

    "This indicates continued growth at a slower rate in the non-manufacturing sector. The Non-Manufacturing Business Activity Index decreased to 55.5 percent, which is 4.2 percentage points lower than the 59.7 percent reported in October, reflecting growth for the 52nd consecutive month, but at a slower rate. The New Orders Index decreased slightly by 0.4 percentage point to 56.4 percent, and the Employment Index decreased 3.7 percentage points to 52.5 percent, indicating growth in employment for the 16th consecutive month, but at a slower rate. The Prices Index decreased 3.9 percentage points to 52.2 percent, indicating prices increased at a slower rate in November when compared to October. According to the NMI®, 11 non-manufacturing industries reported growth in November. Respondents' comments for the most part indicate the non-manufacturing sector is maintaining a steady course of incremental growth and a positive outlook for the upcoming months."
    Category: MBS, ECON
    Share:   
  • 12/4/13
    Overnight volatility was minimal with 10yr yields holding under 2.81 until the start of the domestic session. The ADP Employment figures hit at 8:15am coming in at 215k payrolls vs a forecast of 173k. Bond markets immediately sold off and have only leaked lower since then.

    Fannie 3.5s are off the radar now and we'll be switching to follow 4.0s today (down 18 ticks to 99-22). Fannie 4.0s are down 17 ticks at 103-10. 10yr yields are up more than 7 ticks at 2.8479. S&Ps are off 10 points but did most of their selling before the data.

    There's more to come as well. ISM Non-Manufacturing is an important report coming up at 10am and can have a big impact. If it's similarly stronger than expected, MBS could continue lower. If it's weaker, it could mark the point at which we level off for the day.
    Category: MBS, UPDATE
    Share:   
  • 12/4/13
    New Home Sales Stronger Than Expected
    - New Home Sales 444k vs 428 forecast, 354k previously
    - Single Family Sales +25.4 pct, biggest rise since 1980
    - Median prices $245.8k, down 0.6 pct year over year

    Market Reaction: Taken in and of itself, this would have a negative impact on MBS prices, but the ISM data out at the same time is a more potent market mover. As such, bond markets are slightly improved since 10am, but this New Home Sales data has likely limited the positive bounce.

    Sales of new single-family houses in October 2013 were at a seasonally adjusted annual rate of 444,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 25.4 percent (±19.2%) above the revised September rate of 354,000 and is 21.6 percent (±15.6%) above the October 2012 estimate of 365,000.

    The median sales price of new houses sold in October 2013 was $245,800; the average sales price was $321,700. The seasonally adjusted estimate of new houses for sale at the end of October was 183,000. This represents a supply of 4.9 months at the current sales rate.
    Category: MBS, ECON
    Share:   
  • 12/4/13
    ECON: ISM Non-Manufacturing Weaker Than Expected
    - ISM Services PMI 53.9 vs 55.0 forecast, 55.4 previously
    - Employment 52.6 vs 56.2 previously
    - Employment lowest since May

    - Market Reaction: helping to stem the losses inspired by this morning's ADP data, though it's only been worth 2bps in terms of 10yr yields so far and 7 ticks for Fannie 4.0s.

    "This indicates continued growth at a slower rate in the non-manufacturing sector. The Non-Manufacturing Business Activity Index decreased to 55.5 percent, which is 4.2 percentage points lower than the 59.7 percent reported in October, reflecting growth for the 52nd consecutive month, but at a slower rate. The New Orders Index decreased slightly by 0.4 percentage point to 56.4 percent, and the Employment Index decreased 3.7 percentage points to 52.5 percent, indicating growth in employment for the 16th consecutive month, but at a slower rate. The Prices Index decreased 3.9 percentage points to 52.2 percent, indicating prices increased at a slower rate in November when compared to October. According to the NMI®, 11 non-manufacturing industries reported growth in November. Respondents' comments for the most part indicate the non-manufacturing sector is maintaining a steady course of incremental growth and a positive outlook for the upcoming months."
    Category: MBS, ECON
    Share:   
 
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