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You are viewing Micro News from Monday, Jun 16, 2014 - View all recent Micro News
  • 6/16/14
    MBS Well Off Highs But Reprice Risk is Minimal

    Treasuries have been losing ground since 11:44am--the same time that stock prices bounced.  Since then, 10yr yields have moved up to 2.608, the highs of the day. 

    MBS have come along for the ride, but relative to Treasuries, haven't lost as much ground.  Fannie 3.5s are still in positive territory at 102-01. 

    While that's as much as 5 ticks weaker than the day's best levels, it's still in line with most lenders' rate sheet print times.  As such, most lenders will wait for further losses before considering reprices. 

    Very rarely, a lender or two will reprice based on a strong, intraday selling trend, regardless of the distance from initial rate sheet pricing.  That's more of a reminder for those of you with loans at a lender who's shown that historical predisposition.  For everyone else, we'd need to see 2-3 ticks lower before reprice risk began picking up.

    Category: MBS, UPDATE
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  • 6/16/14
    Bounce Back Pauses After Stronger Homebuilder Sentiment

    After hitting the weakest levels of the day, bond markets began bouncing back just a bit from 9:30am to 10am.  10yr yields made it about 1bp into positive territory and Fannie 3.5s made new highs at 102-04. 

    The move was already leveling off before the 10am homebuilder data, but found no reason to resume to positive trend afterward.  Here's the run-down:

    • Housing Market Index 49 vs 47 forecast (highest since January)
    • Current single family sales 54 vs 48 previously
    • Prospective buyers 36 vs 33 previously
    • 6-month outlook 59 vs 56 previously

    This isn't a tremendously important market mover as far as economic data goes, but it's been tepid and/or downbeat for long enough that any move away from that is potentially significant in the eyes of investors.  There was almost enough reaction today to infer markets paid any attention, but the movement is small enough to be coincidence as well.

    10's are currently still half a bp lower on the day at 2.599 and Fannie 3.5s are 3 ticks higher at 102-02.  They were as high as 102-04 about 15 minutes ago.

    Category: MBS, UPDATE
    Share:   
  • 6/16/14
    Slightly Weaker After Industrial Production Report

    MBS and Treasuries both moved into negative territory after the Industrial Production data, but subsequently ticked back and forth on either side of 'unchanged.'  The data isn't a hugely compelling source of selling-pressure, but the slight move weaker did coincide with its 9:15am print time.

    Industrial Production and Capacity Utilization:

    • May Industrial Output +0.6 vs +0.5 forecast
    • April revised to -0.3 from -0.6
    • Capacity Use rate 79.1 vs 78.9 forecast, 78.9 in April
    • Manufacturing Output +0.6 vs +0.5 forecast, +0.1 in April (highest since March 2008)
    • Excluding Auto sector +0.5 vs -0.3 in April

    Equities futures have also been rising ahead of the 9:30am cash open and the stock lever has been fairly well connected.

    Category: MBS, UPDATE
    Share:   
  • 6/16/14
    Bond Markets Moderately Stronger Overnight; Giving Back Some Gains Now

    Bond markets began the overnight session with a move down toward the important technical level of 2.57.  While 10yr yields have hit 2.57 itself previously in 2014, the last 2 attempts have stopped short in the mid 2.57's.  Case in point, last night's low was 2.577.

    After hitting those lows, there hasn't been much movement into the domestic session.  Empire State Manufacturing data came and went without much fanfare despite the stronger result (19.28 vs 15.0 forecast).  The headline victory could be somewhat offset by the weaker employment component (10.75 vs 20.88 previously).

    That said, if there's a detectable trend since the open, it's toward slightly weaker levels.  At 2.593, 10's are currently at their weakest levels of the morning.  MBS are in fairly similar shape, but haven't really moved much at all from their range of +0-02 to +0-03 overnight.

    Category: MBS, UPDATE
    Share:   
 
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  • 6/16/14

    Treasuries have been losing ground since 11:44am--the same time that stock prices bounced.  Since then, 10yr yields have moved up to 2.608, the highs of the day. 

    MBS have come along for the ride, but relative to Treasuries, haven't lost as much ground.  Fannie 3.5s are still in positive territory at 102-01. 

    While that's as much as 5 ticks weaker than the day's best levels, it's still in line with most lenders' rate sheet print times.  As such, most lenders will wait for further losses before considering reprices. 

    Very rarely, a lender or two will reprice based on a strong, intraday selling trend, regardless of the distance from initial rate sheet pricing.  That's more of a reminder for those of you with loans at a lender who's shown that historical predisposition.  For everyone else, we'd need to see 2-3 ticks lower before reprice risk began picking up.

    Category: MBS, UPDATE
    Share:   
  • 6/16/14

    After hitting the weakest levels of the day, bond markets began bouncing back just a bit from 9:30am to 10am.  10yr yields made it about 1bp into positive territory and Fannie 3.5s made new highs at 102-04. 

    The move was already leveling off before the 10am homebuilder data, but found no reason to resume to positive trend afterward.  Here's the run-down:

    • Housing Market Index 49 vs 47 forecast (highest since January)
    • Current single family sales 54 vs 48 previously
    • Prospective buyers 36 vs 33 previously
    • 6-month outlook 59 vs 56 previously

    This isn't a tremendously important market mover as far as economic data goes, but it's been tepid and/or downbeat for long enough that any move away from that is potentially significant in the eyes of investors.  There was almost enough reaction today to infer markets paid any attention, but the movement is small enough to be coincidence as well.

    10's are currently still half a bp lower on the day at 2.599 and Fannie 3.5s are 3 ticks higher at 102-02.  They were as high as 102-04 about 15 minutes ago.

    Category: MBS, UPDATE
    Share:   
  • 6/16/14

    MBS and Treasuries both moved into negative territory after the Industrial Production data, but subsequently ticked back and forth on either side of 'unchanged.'  The data isn't a hugely compelling source of selling-pressure, but the slight move weaker did coincide with its 9:15am print time.

    Industrial Production and Capacity Utilization:

    • May Industrial Output +0.6 vs +0.5 forecast
    • April revised to -0.3 from -0.6
    • Capacity Use rate 79.1 vs 78.9 forecast, 78.9 in April
    • Manufacturing Output +0.6 vs +0.5 forecast, +0.1 in April (highest since March 2008)
    • Excluding Auto sector +0.5 vs -0.3 in April

    Equities futures have also been rising ahead of the 9:30am cash open and the stock lever has been fairly well connected.

    Category: MBS, UPDATE
    Share:   
  • 6/16/14

    Bond markets began the overnight session with a move down toward the important technical level of 2.57.  While 10yr yields have hit 2.57 itself previously in 2014, the last 2 attempts have stopped short in the mid 2.57's.  Case in point, last night's low was 2.577.

    After hitting those lows, there hasn't been much movement into the domestic session.  Empire State Manufacturing data came and went without much fanfare despite the stronger result (19.28 vs 15.0 forecast).  The headline victory could be somewhat offset by the weaker employment component (10.75 vs 20.88 previously).

    That said, if there's a detectable trend since the open, it's toward slightly weaker levels.  At 2.593, 10's are currently at their weakest levels of the morning.  MBS are in fairly similar shape, but haven't really moved much at all from their range of +0-02 to +0-03 overnight.

    Category: MBS, UPDATE
    Share:   
 
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