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You are viewing Micro News from Monday, Jun 2, 2014 - View all recent Micro News
  • 6/2/14
    The more reactive lenders will already have repriced...
    MBS Updates are a service provided to MBS Live! subscribers only.
    Learn More | Start a Free Trial | View MBS Prices
    Category: MBS, alert
    Share:   
  • 6/2/14
    ISM just confirmed that it used the wrong seasonal...
    MBS Updates are a service provided to MBS Live! subscribers only.
    Learn More | Start a Free Trial | View MBS Prices
    Category: MBS, alert
    Share:   
  • 6/2/14
    In terms of news and events, there's nothing new...
    MBS Updates are a service provided to MBS Live! subscribers only.
    Learn More | Start a Free Trial | View MBS Prices
    Category: MBS, alert
    Share:   
  • 6/2/14
    Post-Data Improvement Fails to Hold; Back to Weakest Levels

    10yr yields just hit the weakest levels of the day despite an earlier rally following the downbeat ISM Manufacturing data.  MBS also moved back in the other direction, just now crossing into the day's lows.

    This willingness to maintain a weaker trajectory despite weak economic data is evidence of the 'unwinding' of last week's slightly overheated bond market demand.  In other words, some of the strength was driven by month-end buying as well as snowball-like momentum from short-sellers being forced to cover.  With those temporary factors out of the picture, we're just seeing a fairly natural correction. 

    Negative reprice risk isn't much of a consideration for most lenders as the gap between initial rate sheets and current prices isn't big enough.  If MBS lost another 2 ticks or more, some lenders would be more at risk for reprices.

    Category: MBS, UPDATE
    Share:   
  • 6/2/14
    Bouncing Back After Weak ISM Manufacturing Data

    Bond markets are undoing some of the damage done overnight and/or earlier this morning.  MBS are quickly up to their best levels of the day, but only about half-way back to Friday's latest levels.  10yr yields didn't quite make it to this morning's lows, but at 2.495, they're close.  Here's a run-down of the data:

    • May ISM Manufacturing PMI (purchasing managers' index) 53.2 vs 55.5 forecast
    • 'Prices Paid' 60.0 vs 57.0 forecast
    • 'New Orders' 53.3 vs 55.1 last month
    • 'Employment 51.9 vs 55.0 forecast

    After the initial move lower in yield and higher in price, MBS and Treasuries have stalled out for now, waiting either for a bigger bounce back or to be disappointed by how small of a bounce is ultimately produced by this weaker-than-expected data.

    Category: MBS, UPDATE
    Share:   
  • 6/2/14
    Bond Markets Weaker as Month-End Trades are Unwound

    9 out of 10 bond traders agree, June is not May (that statistic has a standard error of ±1 trader).  Whereas Friday was a day for the month-end trading environment to firmly defend any rise above 2.50 in 10yr yields, Monday couldn't care less.

    Any time we see markets decidedly doing "something" for "some finite reason," it's not uncommon for them to do at least a little bit of the "opposite of that something" as soon as the finite reason is out of the picture.  Such is the case with a strong showing of month-end buying demand.  It often runs the risk of reversing a bit at the start of the next month.  The bump toward higher yields right at 3pm on Friday was a clue about this phenomenon, and confirmation is arriving presently.

    10yr yields are already up to 2.514 and MBS are down 5 ticks at 102-25.  Stronger data in China is also said to have weighed on bond markets overnight, but if it did, it wasn't much.  Most of the damage has been done in a slow, systematic process that reeks of a small-scale rebalancing of positions among traders (as opposed to the actual reaction to a discrete event).

    As far as discrete events are concerned, this morning's biggie is coming up at 10am with ISM Manufacturing, one of the most important pieces of economic data next to NFP.

    Category: MBS, UPDATE
    Share:   
 
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  • 6/2/14
    The more reactive lenders will already have repriced...
    MBS Updates are a service provided to MBS Live! subscribers only.
    Learn More | Start a Free Trial | View MBS Prices
    Category: MBS, alert
    Share:   
  • 6/2/14
    ISM just confirmed that it used the wrong seasonal...
    MBS Updates are a service provided to MBS Live! subscribers only.
    Learn More | Start a Free Trial | View MBS Prices
    Category: MBS, alert
    Share:   
  • 6/2/14
    In terms of news and events, there's nothing new...
    MBS Updates are a service provided to MBS Live! subscribers only.
    Learn More | Start a Free Trial | View MBS Prices
    Category: MBS, alert
    Share:   
  • 6/2/14

    10yr yields just hit the weakest levels of the day despite an earlier rally following the downbeat ISM Manufacturing data.  MBS also moved back in the other direction, just now crossing into the day's lows.

    This willingness to maintain a weaker trajectory despite weak economic data is evidence of the 'unwinding' of last week's slightly overheated bond market demand.  In other words, some of the strength was driven by month-end buying as well as snowball-like momentum from short-sellers being forced to cover.  With those temporary factors out of the picture, we're just seeing a fairly natural correction. 

    Negative reprice risk isn't much of a consideration for most lenders as the gap between initial rate sheets and current prices isn't big enough.  If MBS lost another 2 ticks or more, some lenders would be more at risk for reprices.

    Category: MBS, UPDATE
    Share:   
  • 6/2/14

    Bond markets are undoing some of the damage done overnight and/or earlier this morning.  MBS are quickly up to their best levels of the day, but only about half-way back to Friday's latest levels.  10yr yields didn't quite make it to this morning's lows, but at 2.495, they're close.  Here's a run-down of the data:

    • May ISM Manufacturing PMI (purchasing managers' index) 53.2 vs 55.5 forecast
    • 'Prices Paid' 60.0 vs 57.0 forecast
    • 'New Orders' 53.3 vs 55.1 last month
    • 'Employment 51.9 vs 55.0 forecast

    After the initial move lower in yield and higher in price, MBS and Treasuries have stalled out for now, waiting either for a bigger bounce back or to be disappointed by how small of a bounce is ultimately produced by this weaker-than-expected data.

    Category: MBS, UPDATE
    Share:   
  • 6/2/14

    9 out of 10 bond traders agree, June is not May (that statistic has a standard error of ±1 trader).  Whereas Friday was a day for the month-end trading environment to firmly defend any rise above 2.50 in 10yr yields, Monday couldn't care less.

    Any time we see markets decidedly doing "something" for "some finite reason," it's not uncommon for them to do at least a little bit of the "opposite of that something" as soon as the finite reason is out of the picture.  Such is the case with a strong showing of month-end buying demand.  It often runs the risk of reversing a bit at the start of the next month.  The bump toward higher yields right at 3pm on Friday was a clue about this phenomenon, and confirmation is arriving presently.

    10yr yields are already up to 2.514 and MBS are down 5 ticks at 102-25.  Stronger data in China is also said to have weighed on bond markets overnight, but if it did, it wasn't much.  Most of the damage has been done in a slow, systematic process that reeks of a small-scale rebalancing of positions among traders (as opposed to the actual reaction to a discrete event).

    As far as discrete events are concerned, this morning's biggie is coming up at 10am with ISM Manufacturing, one of the most important pieces of economic data next to NFP.

    Category: MBS, UPDATE
    Share:   
 
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