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You are viewing Micro News from Thursday, Mar 13, 2014 - View all recent Micro News
  • 3/13/14
    If you Haven't Seen a Reprice Yet, You Probably Will

    Fannie 4.0s are on track for their strongest day of gains since January 10th (lousy NFP day)--up 15 ticks to 104-20, with 18 of those coming in since the day's first rate sheets. 

    Fannie 3.5s are faring even better, as is the tendency when the longer end of the Treasury yield curve is outperforming (because lower MBS coupons imply longer durations--less incentive to refi a lower rate).  They're up 19 on the day and 23 ticks since 9:30am.

    Most lenders have repriced already, some of them twice.  Reprices are an ongoing probability for lenders that haven't released one yet.  Do keep in mind though, some lenders that get saturated with lock on days like today can actually reprice worse.  There aren't many who do this and if one of your lenders does it, you likely already know it's a risk.

    10yr yields are down 7.7bps to 2.649.  Stock prices have been along for the ride all day with Ukraine headlines in the 11am hour clearly kicking off the move.  Markets were already concerned about this weekend and the 11am headlines added fuel to fire.

    Category: MBS, UPDATE
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  • 3/13/14
    Fannie 4.0s are now up 7 ticks on the day (10 since...
    MBS Updates are a service provided to MBS Live! subscribers only.
    Learn More | Start a Free Trial | View MBS Prices
    Category: MBS, alert
    Share:   
  • 3/13/14
    MBS Move Into Positive Territory; Some Reprice Potential Already

    After holding ground earlier this morning in the face of stronger economic data, MBS have clawed their way back into positive territory.  The shift in momentum arrived just after the cash open in stocks with major indices and bond yields both turning on a dime at 9:37am. 

    Since then, 10yr yields have fallen just over 2bps and Fannie 4.0s are up 4 ticks (3.5s are up 6 ticks).  That's enough for some of the earliest lenders to be considering a positive reprice, though they'll typically want to see these gains hold for a bit longer.

    Category: MBS, UPDATE
    Share:   
  • 3/13/14
    Bond Markets Weaker Following Stroner Economic Data

    Treasuries put in their most boring, uneventful overnight session of the week.  10yr yields held a 2bp range all night with no detectable drama and began the domestic session perfectly unchanged, as did MBS.

    The first half hour was similarly quiet and is only moderately interesting since the 8:30am data.  Both Jobless Claims and Retail Sales came in stronger than expectations, but we're not seeing a runaway sell-off (knock on wood).

    Jobless Claims

    • 315k vs 330 forecast, 324k previously
    • 2.855 mln continued claims vs 2.90 forecast
    • Our take on share of market movement: 5/10.  Conventional wisdom would hold that Retail Sales would be the bigger market mover, but Jobless Claims is more interesting than usual due to its nearness to the 'modal' low of the past year at 323k.  Obviously it broke below that today and that will be an important line in the sand next week.

    Retail Sales

    • +.3 vs +.2 forecast, -.6 previously (revised lower from -0.4)
    • Excluding Autos +0.3 vs +0.2 forecast
    • Excluding Autos/Gas/Building Supplies +0.3 vs +0.3 forecast, -0.6 previously (revised lower from -0.3)
    • Our take on share of market movement: 3/10.  This was essentially an "on target" report for the current month and overall a net-negative report once revisions are considered.  About the only harm it does to bond markets is that it solidifies the argument that we're moving past the apex of the weather-related data disruptions.  That said, it likely wouldn't create as much weakness as we're seeing without help from Jobless Claims.  Maybe none at all.

    You might notice 2 missing points from our little "share of market movement" scale above.  Those go to the tradeflow considerations mentioned in the Day Ahead.  Without those, this data would likely be having a bigger impact (pushing bonds even weaker).  As it stands though, MBS are down only 2 ticks and 10yr yields are only 1.5bps higher at 2.74. 

    As an aside, Import/Export Prices also reported at 8:30am.  Both came in much higher than expected because the expectations failed to adequately account for the effects of rising fuel prices.  Hindsight's 20/20, but it lessens any inflationary implications in a data set that doesn't really move markets in the first place.

    Category: MBS, UPDATE
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  • 3/13/14

    Fannie 4.0s are on track for their strongest day of gains since January 10th (lousy NFP day)--up 15 ticks to 104-20, with 18 of those coming in since the day's first rate sheets. 

    Fannie 3.5s are faring even better, as is the tendency when the longer end of the Treasury yield curve is outperforming (because lower MBS coupons imply longer durations--less incentive to refi a lower rate).  They're up 19 on the day and 23 ticks since 9:30am.

    Most lenders have repriced already, some of them twice.  Reprices are an ongoing probability for lenders that haven't released one yet.  Do keep in mind though, some lenders that get saturated with lock on days like today can actually reprice worse.  There aren't many who do this and if one of your lenders does it, you likely already know it's a risk.

    10yr yields are down 7.7bps to 2.649.  Stock prices have been along for the ride all day with Ukraine headlines in the 11am hour clearly kicking off the move.  Markets were already concerned about this weekend and the 11am headlines added fuel to fire.

    Category: MBS, UPDATE
    Share:   
  • 3/13/14
    Fannie 4.0s are now up 7 ticks on the day (10 since...
    MBS Updates are a service provided to MBS Live! subscribers only.
    Learn More | Start a Free Trial | View MBS Prices
    Category: MBS, alert
    Share:   
  • 3/13/14

    After holding ground earlier this morning in the face of stronger economic data, MBS have clawed their way back into positive territory.  The shift in momentum arrived just after the cash open in stocks with major indices and bond yields both turning on a dime at 9:37am. 

    Since then, 10yr yields have fallen just over 2bps and Fannie 4.0s are up 4 ticks (3.5s are up 6 ticks).  That's enough for some of the earliest lenders to be considering a positive reprice, though they'll typically want to see these gains hold for a bit longer.

    Category: MBS, UPDATE
    Share:   
  • 3/13/14

    Treasuries put in their most boring, uneventful overnight session of the week.  10yr yields held a 2bp range all night with no detectable drama and began the domestic session perfectly unchanged, as did MBS.

    The first half hour was similarly quiet and is only moderately interesting since the 8:30am data.  Both Jobless Claims and Retail Sales came in stronger than expectations, but we're not seeing a runaway sell-off (knock on wood).

    Jobless Claims

    • 315k vs 330 forecast, 324k previously
    • 2.855 mln continued claims vs 2.90 forecast
    • Our take on share of market movement: 5/10.  Conventional wisdom would hold that Retail Sales would be the bigger market mover, but Jobless Claims is more interesting than usual due to its nearness to the 'modal' low of the past year at 323k.  Obviously it broke below that today and that will be an important line in the sand next week.

    Retail Sales

    • +.3 vs +.2 forecast, -.6 previously (revised lower from -0.4)
    • Excluding Autos +0.3 vs +0.2 forecast
    • Excluding Autos/Gas/Building Supplies +0.3 vs +0.3 forecast, -0.6 previously (revised lower from -0.3)
    • Our take on share of market movement: 3/10.  This was essentially an "on target" report for the current month and overall a net-negative report once revisions are considered.  About the only harm it does to bond markets is that it solidifies the argument that we're moving past the apex of the weather-related data disruptions.  That said, it likely wouldn't create as much weakness as we're seeing without help from Jobless Claims.  Maybe none at all.

    You might notice 2 missing points from our little "share of market movement" scale above.  Those go to the tradeflow considerations mentioned in the Day Ahead.  Without those, this data would likely be having a bigger impact (pushing bonds even weaker).  As it stands though, MBS are down only 2 ticks and 10yr yields are only 1.5bps higher at 2.74. 

    As an aside, Import/Export Prices also reported at 8:30am.  Both came in much higher than expected because the expectations failed to adequately account for the effects of rising fuel prices.  Hindsight's 20/20, but it lessens any inflationary implications in a data set that doesn't really move markets in the first place.

    Category: MBS, UPDATE
    Share:   
 
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