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You are viewing Micro News from Friday, May 23, 2014 - View all recent Micro News
  • 5/23/14
    In terms of the gap between current prices and those...
    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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  • 5/23/14
    New Home Sales Slightly Stronger; Previous Reading Revised Higher
    • April New Home Sales 433k vs 425k forecast
    • March revised to 407k from 384k
    • Northeast -26.7 pct, Midwest +47.4 pct, South +3.1 pct, West unch'd
    • 5.3 months supply vs 5.6 in March
    • Median Price 275,800 vs 279,300 in April 2013
    • Homes for sale 192k, highest since Nov 2010

    Generally slightly stronger data, but nothing that alters the low, sideways trend in New Home Sales that began in 2013.  Bond markets haven't done anything with the data yet.  MBS are still 4 ticks higher on the day and 10yr yields still hanging around 2.53. 

    Category: MBS, UPDATE
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  • 5/23/14
    Bond Markets Mostly Flat Overnight; Stronger This Morning

    If you typically cruise multiple financial news sites, you might notice almost every one has a headline with the phrase "ahead of New Home Sales."  Without exaggeration, that's because there's no clear motivation for the movement we've seen so far (though we'll discuss some 'suspects' below), and there's nothing else on the calendar or in headlines to discuss.

    With markets closing 3 hours early today, a 3-day weekend ahead, and nothing but New Home Sales on the econ calendar, bond trading is in 'holiday mode' for the most part.  While today's version isn't quite the same as the wintertime half-days (which really obliterate volume and participation), we're still left with a market that's moving serendipitously and with little by way of conviction behind the scenes.  In other words, the path of least resistance for traders is the one to the door.

    When traders are trading like they don't want to be at work (or when their subordinates are trading because they're the only ones left), we generally see two things: an absence of big, trend-altering moves, but also very little resistance (and sometimes 'reason') to moves that stay inside the trend.

    So far, this morning fits both of those conditions.  Bonds were just a bit stronger overnight, and improved further as the domestic session got underway.  The best justifications for the additional strength are the technical picture and tradeflow needs surrounding today's options expiration.

    That technical picture was outlined briefly in The Day Ahead.  Simply put, by moving a bit lower this morning, 10yr yields are choosing to remain inside the 'railroad tracks' marking the post-range-break consolidation pattern.  Moving much higher would threaten to break that mini-trend, or at least make it look less tidy.

    Fannie 3.5s are 4 ticks higher currently at 102-18 and 10yr yields are down 2.3 bps at 2.532.  Bond markets close at 2pm officially.  Unofficially, 2pm usually ends up being more like noon on early close days.

    Category: MBS, UPDATE
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  • 5/23/14
    In terms of the gap between current prices and those...
    MBS Updates are a service provided to MBS Live! subscribers only.
    Learn More | Start a Free Trial | View MBS Prices
    Category: MBS, alert
    Share:   
  • 5/23/14
    • April New Home Sales 433k vs 425k forecast
    • March revised to 407k from 384k
    • Northeast -26.7 pct, Midwest +47.4 pct, South +3.1 pct, West unch'd
    • 5.3 months supply vs 5.6 in March
    • Median Price 275,800 vs 279,300 in April 2013
    • Homes for sale 192k, highest since Nov 2010

    Generally slightly stronger data, but nothing that alters the low, sideways trend in New Home Sales that began in 2013.  Bond markets haven't done anything with the data yet.  MBS are still 4 ticks higher on the day and 10yr yields still hanging around 2.53. 

    Category: MBS, UPDATE
    Share:   
  • 5/23/14

    If you typically cruise multiple financial news sites, you might notice almost every one has a headline with the phrase "ahead of New Home Sales."  Without exaggeration, that's because there's no clear motivation for the movement we've seen so far (though we'll discuss some 'suspects' below), and there's nothing else on the calendar or in headlines to discuss.

    With markets closing 3 hours early today, a 3-day weekend ahead, and nothing but New Home Sales on the econ calendar, bond trading is in 'holiday mode' for the most part.  While today's version isn't quite the same as the wintertime half-days (which really obliterate volume and participation), we're still left with a market that's moving serendipitously and with little by way of conviction behind the scenes.  In other words, the path of least resistance for traders is the one to the door.

    When traders are trading like they don't want to be at work (or when their subordinates are trading because they're the only ones left), we generally see two things: an absence of big, trend-altering moves, but also very little resistance (and sometimes 'reason') to moves that stay inside the trend.

    So far, this morning fits both of those conditions.  Bonds were just a bit stronger overnight, and improved further as the domestic session got underway.  The best justifications for the additional strength are the technical picture and tradeflow needs surrounding today's options expiration.

    That technical picture was outlined briefly in The Day Ahead.  Simply put, by moving a bit lower this morning, 10yr yields are choosing to remain inside the 'railroad tracks' marking the post-range-break consolidation pattern.  Moving much higher would threaten to break that mini-trend, or at least make it look less tidy.

    Fannie 3.5s are 4 ticks higher currently at 102-18 and 10yr yields are down 2.3 bps at 2.532.  Bond markets close at 2pm officially.  Unofficially, 2pm usually ends up being more like noon on early close days.

    Category: MBS, UPDATE
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