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You are viewing Micro News from Thursday, Feb 6, 2014 - View all recent Micro News
  • 2/6/14
    Despite holding their ground fairly well earlier this...
    MBS Updates are a service provided to MBS Live! subscribers only.
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  • 2/6/14
    Bond Markets Weaker, but Reluctantly so

    Treasuries were just slightly weaker overnight.  10yr yields crossed back into positive territory just briefly near the start of the European session but were pulled higher by equities and core European debt markets into the 5am hour. There was some additional weakness after the glut of economic data at 8:30am. 

    ECB President Mario Draghi also began his monthly press conference at that time and those headlines may be adding to minor volatility.  So far that's no noticeable bias in Draghi's comments, and a net neutral affect on domestic bond markets.

    Here's a round-up of the econ data.

    Jobless Claims

    • 331k vs 335k forecast
    • continued claims 2.964k vs 2.998k forecast
    • Our take on share of market movement: 7/10.  This is moving markets as much as anything, largely because everything else is so ho-hum.  Granted, it's not a big beat by any means, but it's also the 'absence of a miss' against a default backdrop that favored moderate weakness
    • Full Release

    International Trade

    • Trade gap $38.70 bln vs $36.0 bln forecast
    • 2013 trade gap smallest since 2009
    • Our take on share of market movement: 1/10.  Not a market mover
    • Full Release

    Productivity and Costs

    • Q4 productivity +3.2 vs +2.5 forecast
    • Labor Costs -1.6 vs -0.5 forecast
    • Our take on share of market movement: 2/10. Not much of a market mover, though there is a slightly positive implication for the economy when productivity is increasing and labor costs are falling.  That said, Productivity is a bit of double-edged sword because as it rises, there's an implication that fewer jobs are needed to create the same output--a slightly negative commentary on payrolls figures.
    • Full Release

    Even after the time required to type all that up, markets haven't moved much.  On a slightly resilient note, US bond markets are holding up relatively well vs core European markets (German Bunds are getting hit harder by comparison).  US Treasuries may be seeing some slight upward pressure from that weakness, but counterbalanced from weaker equities markets since the data.

    S&P futures are down about 5 points since 8:30am but up 5 points on session.  That does a nice job of coexisting with a bond market that's slightly weaker overall, but resilient since the data.

    To quantify that, 10yr yields are up 1.4bps at 2.6821 but only a third of that weakness has come in since the data.  Fannie 4.0s are down only 1 tick at 104-21 and 3.5s are down 3 at 101-09.  That's it for economic data this morning, but there will be Fed-speak from Tarullo at 10am.  Rosengren also speaks today, but after market hours.

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  • 2/6/14
    Despite holding their ground fairly well earlier this...
    MBS Updates are a service provided to MBS Live! subscribers only.
    Learn More | Start a Free Trial | View MBS Prices
    Category: MBS, alert
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  • 2/6/14

    Treasuries were just slightly weaker overnight.  10yr yields crossed back into positive territory just briefly near the start of the European session but were pulled higher by equities and core European debt markets into the 5am hour. There was some additional weakness after the glut of economic data at 8:30am. 

    ECB President Mario Draghi also began his monthly press conference at that time and those headlines may be adding to minor volatility.  So far that's no noticeable bias in Draghi's comments, and a net neutral affect on domestic bond markets.

    Here's a round-up of the econ data.

    Jobless Claims

    • 331k vs 335k forecast
    • continued claims 2.964k vs 2.998k forecast
    • Our take on share of market movement: 7/10.  This is moving markets as much as anything, largely because everything else is so ho-hum.  Granted, it's not a big beat by any means, but it's also the 'absence of a miss' against a default backdrop that favored moderate weakness
    • Full Release

    International Trade

    • Trade gap $38.70 bln vs $36.0 bln forecast
    • 2013 trade gap smallest since 2009
    • Our take on share of market movement: 1/10.  Not a market mover
    • Full Release

    Productivity and Costs

    • Q4 productivity +3.2 vs +2.5 forecast
    • Labor Costs -1.6 vs -0.5 forecast
    • Our take on share of market movement: 2/10. Not much of a market mover, though there is a slightly positive implication for the economy when productivity is increasing and labor costs are falling.  That said, Productivity is a bit of double-edged sword because as it rises, there's an implication that fewer jobs are needed to create the same output--a slightly negative commentary on payrolls figures.
    • Full Release

    Even after the time required to type all that up, markets haven't moved much.  On a slightly resilient note, US bond markets are holding up relatively well vs core European markets (German Bunds are getting hit harder by comparison).  US Treasuries may be seeing some slight upward pressure from that weakness, but counterbalanced from weaker equities markets since the data.

    S&P futures are down about 5 points since 8:30am but up 5 points on session.  That does a nice job of coexisting with a bond market that's slightly weaker overall, but resilient since the data.

    To quantify that, 10yr yields are up 1.4bps at 2.6821 but only a third of that weakness has come in since the data.  Fannie 4.0s are down only 1 tick at 104-21 and 3.5s are down 3 at 101-09.  That's it for economic data this morning, but there will be Fed-speak from Tarullo at 10am.  Rosengren also speaks today, but after market hours.

    Category: MBS, UPDATE
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