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You are viewing Micro News from Thursday, Mar 6, 2014 - View all recent Micro News
  • 3/6/14
    Coasting Out, Little-Changed Since AM

    Volatility came and went early today for bond markets.  In fact, the only real volatility existed inside a fairly narrow range that would have barely registered on Tuesday.  For MBS, it's been a 3/32nds range since 11:30am. 

    Treasuries were only slightly more volatile as large, inexplicable trades flow in and out surrounding an exceptionally heavy slate of corporate bond issuance.  (If you need a refresher on how corporate bond hedging can trickle down to MBS via Treasuries, check out this old post on last Fall's Verizon deal).

    Despite the lack of substantive gains, several lenders repriced positively.  MBS are drastically outperforming Treasuries on a lack of supply, a supportive-looking technical relationship between the two, and the aforementioned corporate hedging taking a more Treasury-specific toll.  Then of course there's the geopolitical risk 'unwinding' process which also affects Treasuries more than MBS. 

    All this is minutia in the bigger picture as bond markets have merely sought out central territory from which to digest tomorrow's jobs data.

    Category: MBS, UPDATE
    Share:   
  • 3/6/14
    Bond Markets Weaker After Overnight Session and Morning Data

    Both the overnight session and the first round of economic data have been roughly equal in their negative effects on MBS and Treasuries. Weakness during the overnight session was more moderately-paced, even as core European debt popped noticeably higher in yield at 6:45am.

    The weakness following this morning's economic data has been sharper by comparison with 10yr yields moving up a quick 2bps to 2.737.  MBS are outperforming, but still down 4 ticks in Fannie 4.0s and 6 ticks in Fannie 3.5s.

    Jobless Claims

    • 323k vs 338k forecast
    • previous week revised to 349k from 348k
    • Continued Claims 2.907 mln vs 2.973 mln forecast
    • Big downward revision from previous 2.964mln to 2.915 mln
    • Thoughts on market movement: Of the two reports out at 8:30am, this one is much more of a market mover.  This is one of the bigger gaps between expectations and actual results in Jobless Claims recently and one of the bigger downward revisions to Continued Claims.

    Productivity and Costs

    • Productivity +1.8 vs +2.5 forecast
    • Unit Labor Costs -0.1 vs -0.9 forecast

    The selling hasn't been catastrophic yet with 10's mounting a brief comeback into 2.72's before heading back into the 2.73's just now.  S&Ps hit a ceiling before breaking overnight highs and are back in line with unchanged levels.  Mario Draghi is answering questions at the post-ECB Rate Decision press conference.

    Category: MBS, UPDATE
    Share:   
 
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  • 3/6/14

    Volatility came and went early today for bond markets.  In fact, the only real volatility existed inside a fairly narrow range that would have barely registered on Tuesday.  For MBS, it's been a 3/32nds range since 11:30am. 

    Treasuries were only slightly more volatile as large, inexplicable trades flow in and out surrounding an exceptionally heavy slate of corporate bond issuance.  (If you need a refresher on how corporate bond hedging can trickle down to MBS via Treasuries, check out this old post on last Fall's Verizon deal).

    Despite the lack of substantive gains, several lenders repriced positively.  MBS are drastically outperforming Treasuries on a lack of supply, a supportive-looking technical relationship between the two, and the aforementioned corporate hedging taking a more Treasury-specific toll.  Then of course there's the geopolitical risk 'unwinding' process which also affects Treasuries more than MBS. 

    All this is minutia in the bigger picture as bond markets have merely sought out central territory from which to digest tomorrow's jobs data.

    Category: MBS, UPDATE
    Share:   
  • 3/6/14

    Both the overnight session and the first round of economic data have been roughly equal in their negative effects on MBS and Treasuries. Weakness during the overnight session was more moderately-paced, even as core European debt popped noticeably higher in yield at 6:45am.

    The weakness following this morning's economic data has been sharper by comparison with 10yr yields moving up a quick 2bps to 2.737.  MBS are outperforming, but still down 4 ticks in Fannie 4.0s and 6 ticks in Fannie 3.5s.

    Jobless Claims

    • 323k vs 338k forecast
    • previous week revised to 349k from 348k
    • Continued Claims 2.907 mln vs 2.973 mln forecast
    • Big downward revision from previous 2.964mln to 2.915 mln
    • Thoughts on market movement: Of the two reports out at 8:30am, this one is much more of a market mover.  This is one of the bigger gaps between expectations and actual results in Jobless Claims recently and one of the bigger downward revisions to Continued Claims.

    Productivity and Costs

    • Productivity +1.8 vs +2.5 forecast
    • Unit Labor Costs -0.1 vs -0.9 forecast

    The selling hasn't been catastrophic yet with 10's mounting a brief comeback into 2.72's before heading back into the 2.73's just now.  S&Ps hit a ceiling before breaking overnight highs and are back in line with unchanged levels.  Mario Draghi is answering questions at the post-ECB Rate Decision press conference.

    Category: MBS, UPDATE
    Share:   
 
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