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You are viewing Micro News from Friday, Jan 17, 2014 - View all recent Micro News
  • 1/17/14
    Shaking Off Weakness; Back in Positive Territory Now

    After the slightly weaker Consumer Sentiment data gave way to a bit of paradoxical weakness in MBS, bond markets have since found their footing.  Actually, the y found their footing only 5-10 minutes after the data, but have now done enough to confirm that possibility by getting back in line with previous levels.

    That means we're back in positive territory, albeit just slightly.  There is still no verdict on this morning's bigger-picture movement as 10's remain blocked by resistance in the 2.82-2.84 range.  This coincides with 104-00 to 104-02 in Fannie 4.0s. 

    Category: MBS, UPDATE
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  • 1/17/14
    Consumer Sentiment 80.4 vs 83.5 forecast, 82.5 last...
    MBS Updates are a service provided to MBS Live! subscribers only.
    Learn More | Start a Free Trial | View MBS Prices
    Category: MBS, alert
    Share:   
  • 1/17/14
    Bond Markets Back to Unchanged after Industrial Production (Not Necessarily Because of it)

    Here are the details on the Industrial Production report:

    • Industrial Output: +0.3 vs +0.3 forecast
    • Capacity Use Rate 79.2 vs 79.1 forecast
    • Full Report
    • Market movement thoughts: It looks like weakness lines up with this report, but it probably isn't nearly as correlated as it seems.  More to do with stock market open.

    There's nothing too special about the data.  Additionally, the bigger move and bigger dose of selling volume in bond markets arrived at 9:19am.  If it was data-related, we would have seen it right at 9:15am.

    The better bet is that the weakness is due to the combination of low volumes overall, technical resistance for both MBS and Treasuries, and money shuffling ahead of the equities open.  The low volume doesn't create weakness, but it does mean that if a big account or two is selling Treasuries for liquidity at the equities opening bell, those trades would have more of an effect on price levels (i.e. takes less $$ to move markets in low volume).

    Whatever the case may be, Consumer Sentiment in 6 minutes will have a chance to confirm this negative bounce or put an end to it.  That said, it could still be inconclusive if it comes in close to consensus.

    Category: MBS, UPDATE
    Share:   
  • 1/17/14
    For 3rd Straight Day, Bonds Flat Overnight, Slightly Stronger After Data

    If the overnight activity in Treasuries showed up on your 2-day chart, it would look like a very flat, very calm extension of yesterday afternoon's flat, calm trading range.  Something like this:

    10yr Treasuries

    Once again, the first hour of trading has served to confirm and/or improve upon the overnight trend (3rd day in a row now), though the movement hasn't been huge.  Chalk that up to the relatively close-to-consensus print in Housing Starts.  Details of that report:

    • Housing Starts -9.8 pct, most since April
    • Starts 999k unit rate vs 990k forecast, 1,107k previously
    • Permits 986k vs 1,015k forecast
    • Single Fam starts -7.0 pct, Multi Fam -14.9
    • Market Movement Thoughts: We don't put much stock in the "biggest drop since April."  This report is a moderate market mover when far from consensus, and at 999k vs 990k forecast, this is not far from consensus.  The tepid reaction reflects that.
    • Full Release

    Treasuries and MBS mildly extended their gains following the data.  Fannie 4.0s are 3 ticks higher at 104-01 and 10's 1bp lower at 2.836.  Industrial Production is coming up presently.

    Category: MBS, UPDATE
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  • 1/17/14

    After the slightly weaker Consumer Sentiment data gave way to a bit of paradoxical weakness in MBS, bond markets have since found their footing.  Actually, the y found their footing only 5-10 minutes after the data, but have now done enough to confirm that possibility by getting back in line with previous levels.

    That means we're back in positive territory, albeit just slightly.  There is still no verdict on this morning's bigger-picture movement as 10's remain blocked by resistance in the 2.82-2.84 range.  This coincides with 104-00 to 104-02 in Fannie 4.0s. 

    Category: MBS, UPDATE
    Share:   
  • 1/17/14
    Consumer Sentiment 80.4 vs 83.5 forecast, 82.5 last...
    MBS Updates are a service provided to MBS Live! subscribers only.
    Learn More | Start a Free Trial | View MBS Prices
    Category: MBS, alert
    Share:   
  • 1/17/14

    Here are the details on the Industrial Production report:

    • Industrial Output: +0.3 vs +0.3 forecast
    • Capacity Use Rate 79.2 vs 79.1 forecast
    • Full Report
    • Market movement thoughts: It looks like weakness lines up with this report, but it probably isn't nearly as correlated as it seems.  More to do with stock market open.

    There's nothing too special about the data.  Additionally, the bigger move and bigger dose of selling volume in bond markets arrived at 9:19am.  If it was data-related, we would have seen it right at 9:15am.

    The better bet is that the weakness is due to the combination of low volumes overall, technical resistance for both MBS and Treasuries, and money shuffling ahead of the equities open.  The low volume doesn't create weakness, but it does mean that if a big account or two is selling Treasuries for liquidity at the equities opening bell, those trades would have more of an effect on price levels (i.e. takes less $$ to move markets in low volume).

    Whatever the case may be, Consumer Sentiment in 6 minutes will have a chance to confirm this negative bounce or put an end to it.  That said, it could still be inconclusive if it comes in close to consensus.

    Category: MBS, UPDATE
    Share:   
  • 1/17/14

    If the overnight activity in Treasuries showed up on your 2-day chart, it would look like a very flat, very calm extension of yesterday afternoon's flat, calm trading range.  Something like this:

    10yr Treasuries

    Once again, the first hour of trading has served to confirm and/or improve upon the overnight trend (3rd day in a row now), though the movement hasn't been huge.  Chalk that up to the relatively close-to-consensus print in Housing Starts.  Details of that report:

    • Housing Starts -9.8 pct, most since April
    • Starts 999k unit rate vs 990k forecast, 1,107k previously
    • Permits 986k vs 1,015k forecast
    • Single Fam starts -7.0 pct, Multi Fam -14.9
    • Market Movement Thoughts: We don't put much stock in the "biggest drop since April."  This report is a moderate market mover when far from consensus, and at 999k vs 990k forecast, this is not far from consensus.  The tepid reaction reflects that.
    • Full Release

    Treasuries and MBS mildly extended their gains following the data.  Fannie 4.0s are 3 ticks higher at 104-01 and 10's 1bp lower at 2.836.  Industrial Production is coming up presently.

    Category: MBS, UPDATE
    Share:   
 
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