Register or Sign in        Email This Page     Link To This Page    
Visit MND at MBA in NYC!
1,270
# of Questions
Micro News Archives
Use the calendar to view Micro News posts from a specific date.
Today  |  Yesterday  |  Random
Bottom Right Default
State Name: New Jersey
State Name underscore: New_Jersey
State Name dash: New-Jersey
State Name lower underscore: new_jersey
State Name lower dash: new-jersey
State Name lower: new jersey
State Abbreviation: NJ
State Abbreviation Lower: nj
You are viewing Micro News from Friday, Apr 4, 2014 - View all recent Micro News
  • 4/4/14
    There are big green numbers on the screen today, and...
    MBS Updates are a service provided to MBS Live! subscribers only.
    Learn More | Start a Free Trial | View MBS Prices
    Category: MBS, alert
    Share:   
  • 4/4/14
    European Close Cools Bond Rally, But That Can be a Good Thing

    After we saw the second leg of this morning's bond market rally clearly being driven by Europe, the possibility existed that momentum would dry up as the European session ended at noon Eastern.  Indeed high noon marked high prices for US bond markets including MBS.

    So far, there hasn't been an unpleasant bounce back in the other direction.  That leaves us with the best situation for an NFP-Friday Rally: a smooth leveling-off into the afternoon.

    Why is it a good thing for prices to stop going higher? 

    Two reasons:

    1. Volatility is a net-negative for rates.  While volatility that pushes prices significantly higher will certainly help rate sheets improve, fewer gains will be immediately realized than if prices take the slow and steady approach. 

    2. Given the choice, lenders who are going to reprices would prefer to do it once and be done with it.  As such, a pull-back or 'leveling-off' in prices provides a perfect cue to pull the trigger on a reprice that may have been on hold while prices were still rising.

    Case in point, a majority of the day's reprices have come in during the past hour and if you haven't seen one yet, it remains a distinct possibility.

    Category: MBS, UPDATE
    Share:   
  • 4/4/14
    ECB QE Headlines: The Real Post-NFP Market Mover

    NFP missed forecasts and bond markets rallied.  Woo hoo!  Right?

    While the evening news and indeed many financial news outlets may limit the day's conclusions to something that simple, there's more to the story right now... a LOT more.

    About 20 minutes ago, some very big headlines came out of Europe, saying the ECB has modeled a QE Program involving 1 trillion Euros of securities purchased over the course of 12 months. 

    Core European debt is now officially leading this rally.  This is HIGHLY uncommon on NFP days.  It's almost always the case the US Treasuries are making the biggest moves after NFP with the rest of the world's bond markets following.  Indeed that was true until the ECB headlines, but not anymore. 

    If we set 10yr Treasuries and 10yr German Bunds to a scale based on their 2014 highs through yesterday, here's how they look today (keep in mind, what normally happens is that the yellow line is making the sharper movement, and obviously, it did at 8:30am, but since then, it's all Europe):

    2014-4-4 Bunds vs Treasuries

    Category: MBS, UPDATE
    Share:   
  • 4/4/14
    Bond Markets Rally Back to Best Levels; Meeting Resistance Again

    Just an update on post-NFP volatility.  After Treasuries rallied and sold nearly 5bps in the first 7 minutes following NFP, the subsequent move has been a more stable rally back to the day's best levels, yields once again reached the 2.75's, but have bumped back up to 2.7643 

    MBS were up 12 ticks to 104-03, but are back to a 9 tick gain at 104-00 at the moment.  They never sold-off quite as much as Treasuries, largely because they're not as liquid.  The latter is susceptible to far more rapid swings because more people trade Treasuries and there are more ways to do so--the most significant "additional way" being in the futures market.

    Activity there suggests a good amount of short-covering fueling the rally.  That means traders who had been betting on rates moving higher were forced (or chose) to cover those bets after NFP.  That's not the best reason for bond markets to rally from a longevity standpoint, but it's not the only consideration in play. 

    In plainer terms, some of the rally is fueled by temporary factors. We probably won't find out how much until next week, though clues could come as early as today based on how the rest of the morning trades.

    Category: MBS, UPDATE
    Share:   
  • 4/4/14
    Knee Jerk Rally Fighting for Survival After Near-Consensus NFP

    Nonfarm payrolls came int just slightly lower than expected, but in terms of total jobs, the last 2 months of revisions added 37k.  Today's payrolls were 192k vs a 200k forecast. 

    The jobless rate ticked up to 6.7 as labor force participation increased, and private payrolls were almost perfectly in line with forecasts--192k vs 195k.

    Bond markets rallied sharply in the first minute or two with 10yr yields moving down to the high 2.75's before returning to unchanged levels.  They've since turned course yet again and are about half-way back to their best levels--currently 2.777.

    MBS have outperformed a bit, and been less volatile in the wake of the data.  Fannie 4.0s are near their 103-31 highs (1 tick off at 103-30 at the moment).

    Frankly, the rally is only justified if you assume that bond markets were prepared to get smacked with a much stronger result, because today's result is fairly strong.  If the previous two months hadn't been revised, it would be like getting a 229k print.  Considering that, any closing level today that leaves bond markets unchanged or better is a victory.

    Category: MBS, UPDATE
    Share:   
 
No Micro News Posts Here.

Options:
 
MBS Micro News updates are a service provided to MBSonMND subscribers only.
Learn More | Start a Free Trial | Open the Dashboard
  • 4/4/14
    There are big green numbers on the screen today, and...
    MBS Updates are a service provided to MBS Live! subscribers only.
    Learn More | Start a Free Trial | View MBS Prices
    Category: MBS, alert
    Share:   
  • 4/4/14

    After we saw the second leg of this morning's bond market rally clearly being driven by Europe, the possibility existed that momentum would dry up as the European session ended at noon Eastern.  Indeed high noon marked high prices for US bond markets including MBS.

    So far, there hasn't been an unpleasant bounce back in the other direction.  That leaves us with the best situation for an NFP-Friday Rally: a smooth leveling-off into the afternoon.

    Why is it a good thing for prices to stop going higher? 

    Two reasons:

    1. Volatility is a net-negative for rates.  While volatility that pushes prices significantly higher will certainly help rate sheets improve, fewer gains will be immediately realized than if prices take the slow and steady approach. 

    2. Given the choice, lenders who are going to reprices would prefer to do it once and be done with it.  As such, a pull-back or 'leveling-off' in prices provides a perfect cue to pull the trigger on a reprice that may have been on hold while prices were still rising.

    Case in point, a majority of the day's reprices have come in during the past hour and if you haven't seen one yet, it remains a distinct possibility.

    Category: MBS, UPDATE
    Share:   
  • 4/4/14

    NFP missed forecasts and bond markets rallied.  Woo hoo!  Right?

    While the evening news and indeed many financial news outlets may limit the day's conclusions to something that simple, there's more to the story right now... a LOT more.

    About 20 minutes ago, some very big headlines came out of Europe, saying the ECB has modeled a QE Program involving 1 trillion Euros of securities purchased over the course of 12 months. 

    Core European debt is now officially leading this rally.  This is HIGHLY uncommon on NFP days.  It's almost always the case the US Treasuries are making the biggest moves after NFP with the rest of the world's bond markets following.  Indeed that was true until the ECB headlines, but not anymore. 

    If we set 10yr Treasuries and 10yr German Bunds to a scale based on their 2014 highs through yesterday, here's how they look today (keep in mind, what normally happens is that the yellow line is making the sharper movement, and obviously, it did at 8:30am, but since then, it's all Europe):

    2014-4-4 Bunds vs Treasuries

    Category: MBS, UPDATE
    Share:   
  • 4/4/14

    Just an update on post-NFP volatility.  After Treasuries rallied and sold nearly 5bps in the first 7 minutes following NFP, the subsequent move has been a more stable rally back to the day's best levels, yields once again reached the 2.75's, but have bumped back up to 2.7643 

    MBS were up 12 ticks to 104-03, but are back to a 9 tick gain at 104-00 at the moment.  They never sold-off quite as much as Treasuries, largely because they're not as liquid.  The latter is susceptible to far more rapid swings because more people trade Treasuries and there are more ways to do so--the most significant "additional way" being in the futures market.

    Activity there suggests a good amount of short-covering fueling the rally.  That means traders who had been betting on rates moving higher were forced (or chose) to cover those bets after NFP.  That's not the best reason for bond markets to rally from a longevity standpoint, but it's not the only consideration in play. 

    In plainer terms, some of the rally is fueled by temporary factors. We probably won't find out how much until next week, though clues could come as early as today based on how the rest of the morning trades.

    Category: MBS, UPDATE
    Share:   
  • 4/4/14

    Nonfarm payrolls came int just slightly lower than expected, but in terms of total jobs, the last 2 months of revisions added 37k.  Today's payrolls were 192k vs a 200k forecast. 

    The jobless rate ticked up to 6.7 as labor force participation increased, and private payrolls were almost perfectly in line with forecasts--192k vs 195k.

    Bond markets rallied sharply in the first minute or two with 10yr yields moving down to the high 2.75's before returning to unchanged levels.  They've since turned course yet again and are about half-way back to their best levels--currently 2.777.

    MBS have outperformed a bit, and been less volatile in the wake of the data.  Fannie 4.0s are near their 103-31 highs (1 tick off at 103-30 at the moment).

    Frankly, the rally is only justified if you assume that bond markets were prepared to get smacked with a much stronger result, because today's result is fairly strong.  If the previous two months hadn't been revised, it would be like getting a 229k print.  Considering that, any closing level today that leaves bond markets unchanged or better is a victory.

    Category: MBS, UPDATE
    Share:   
 
No Micro News Posts Here.

Options:
 
 
No Micro News Posts Here.

Options:
 
 
No Micro News Posts Here.

Options:
 
Did you know?
You can see a list of all comments on MND by clicking the 'Read the Latest Comments' option under the 'Community' menu.
 

More From MND

Mortgage Rates:
  • 30 Yr FRM 4.24%
  • |
  • 15 Yr FRM 3.39%
  • |
  • Jumbo 30 Year Fixed 4.09%
MBS Prices:
  • 30YR FNMA 4.5 107-13 (0-00)
  • |
  • 30YR FNMA 5.0 109-32 (0-00)
  • |
  • 30YR FNMA 5.5 111-04 (-0-01)
Recent Housing Data:
  • Mortgage Apps -7.23%
  • |
  • Refinance Index -10.65%
  • |
  • FHFA Home Price Index 0.67%