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State Name: Washington
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You are viewing Micro News from Tuesday, Jul 15, 2014 - View all recent Micro News
  • 7/15/14
    Ongoing Weakness Heading Into Last Hour; MBS Still Off Lows

    Fannie 3.5s are down 4 ticks on the day at 102-01.  While this is still a few ticks above the earlier lows, it puts MBS back in a situation where some lenders' initial rate sheets came out when prices were an eighth of a point higher.  This is basically the leading edge of negative reprice risk, though it's worth noting that it didn't result in negative reprices earlier today.

    10yr yields have also been losing ground progressively and are now back up to 2.556 after hitting 2.53 just after 1pm.  Negative reprice risk is almost entirely absent, but can't be ruled out completely in some isolated cases.  The biggest increase in risk would require another visit to the morning lows.

    Category: MBS, UPDATE
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  • 7/15/14
    Holding Ground/Moderate Bounce; Reprice Risk Pulling Back

    Negative reprice risk is staying at bay for now.  It's not altogether absent, but has pulled back from the levels associated with the last alert.  10yr yields were as high as 2.57 and have now bounced to 2.56.  Fannie 3.5s are now down only 3 ticks after being 6 ticks lower at the time of the previous alert.  

    As long as these bounces continue to hold, we can avoid a majority of the previous reprice risk. 

    Senate questions for Yellen have been decent but boring.  No major surprises.

    Category: MBS, UPDATE
    Share:   
  • 7/15/14
    Short-term technicals look increasingly bearish for...
    MBS Updates are a service provided to MBS Live! subscribers only.
    Learn More | Start a Free Trial | View MBS Prices
    Category: MBS, alert
    Share:   
  • 7/15/14
    Depending on the time of day a lender released rates...
    MBS Updates are a service provided to MBS Live! subscribers only.
    Learn More | Start a Free Trial | View MBS Prices
    Category: MBS, alert
    Share:   
  • 7/15/14
    Back in Positive Territory As Yellen Testimony Begins

    MBS and Treasuries are quickly back into positive territory after Fed Chair Yellen's prepared remarks contained no negative surprises.  Here are the highlights:

    • Fed's Yellen says economy continuing to improve but recovery not yet complete
    • Yellen says increases in federal funds rate target likely would occur sooner and be more rapid than currently envisioned if labor market continues to improve more quickly than anticipated by FOMC
    • Yellen says FOMC believes high degree of monetary policy accommodation remains appropriate
    • Fed's balance sheet to hit $4.5 trillion when bond-buying likely ends in October - fed monetary policy report
    • Use of fed funds to control interest rates "will not be feasible" during policy normalization - fed monetary policy report
    • Yellen says prices for real estate, equities and corporate bonds have risen appreciably but remain generally in line with historical norms
    • Yellen says too many Americans remain unemployed, inflation remains below fed's long-run objective and necessary financial reforms remain incomplete
    • Yellen says housing sector has recovered notably but activity has leveled off and readings this year continue to be disappointing
    • Yellen says significant slack remains in labor markets, highlighted by the continued slow pace of growth in most measures of hourly compensation
    • Yellen says most FOMC participants project that total and core inflation will be between 1.5 percent and 1.75 percent for this year as a whole
    • Yellen says "considerable uncertainty" surrounds FOMC's projections for economic growth, unemployment and inflation
    • Yellen says FOMC participants currently judge these risks to be nearly balanced but warrant monitoring in months ahead

    10yr yields are now down 1.81bps on the day to 2.53 and Fannie 3.5s are up 2 ticks at 102-06.

    Category: MBS, UPDATE
    Share:   
  • 7/15/14
    Bond Markets Weaker After Retail Sales

    Retail Sales

    • June Retail Sales +0.2 vs +0.6 forecast
    • May revised to +0.5 from +0.3
    • Excluding Autos +0.4 vs +0.5 forecast, May revised to +0.4 from +0.1
    • Excluding Autos/Building Materials/Gas, +0.6 vs +0.5 forecast, May revised to +0.2 from 0.0

    Empire State Manufacturing

    • 25.60 vs 17.0 forecast, 19.28 last month
    • Employment Index 17.05 vs 10.75 previously

    Import/Export Prices

    • Import Prices +0.1 vs +0.3 forecast
    • Export Prices -0.4 vs +0.2 forecast

    At face value the 0.2 vs 0.6 miss in Retail Sales should be a strong positive for bond markets, yet MBS and Treasuries are now moving into slightly weaker territory. 

    The counterpoints to the stronger Retail Sales headlines lie in the reports internals.  First off, the components (that stuff that "excludes" other stuff like autos or gas or building supplies or all three) was stronger than expected.  Additionally, May's numbers were revised higher across the board--in some cases significantly. 

    With the Empire State Manufacturing index also coming in stronger than expected, there's a strong enough case against bond markets for now, but markets may avoid getting too carried away before the 10am Yellen testimony.

    Fannie 3.5s are currently down 4 ticks at 102-02 and 10yr yields are up a bp at 2.556.

    Category: MBS, UPDATE
    Share:   
 
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  • 7/15/14

    Fannie 3.5s are down 4 ticks on the day at 102-01.  While this is still a few ticks above the earlier lows, it puts MBS back in a situation where some lenders' initial rate sheets came out when prices were an eighth of a point higher.  This is basically the leading edge of negative reprice risk, though it's worth noting that it didn't result in negative reprices earlier today.

    10yr yields have also been losing ground progressively and are now back up to 2.556 after hitting 2.53 just after 1pm.  Negative reprice risk is almost entirely absent, but can't be ruled out completely in some isolated cases.  The biggest increase in risk would require another visit to the morning lows.

    Category: MBS, UPDATE
    Share:   
  • 7/15/14

    Negative reprice risk is staying at bay for now.  It's not altogether absent, but has pulled back from the levels associated with the last alert.  10yr yields were as high as 2.57 and have now bounced to 2.56.  Fannie 3.5s are now down only 3 ticks after being 6 ticks lower at the time of the previous alert.  

    As long as these bounces continue to hold, we can avoid a majority of the previous reprice risk. 

    Senate questions for Yellen have been decent but boring.  No major surprises.

    Category: MBS, UPDATE
    Share:   
  • 7/15/14
    Short-term technicals look increasingly bearish for...
    MBS Updates are a service provided to MBS Live! subscribers only.
    Learn More | Start a Free Trial | View MBS Prices
    Category: MBS, alert
    Share:   
  • 7/15/14
    Depending on the time of day a lender released rates...
    MBS Updates are a service provided to MBS Live! subscribers only.
    Learn More | Start a Free Trial | View MBS Prices
    Category: MBS, alert
    Share:   
  • 7/15/14

    MBS and Treasuries are quickly back into positive territory after Fed Chair Yellen's prepared remarks contained no negative surprises.  Here are the highlights:

    • Fed's Yellen says economy continuing to improve but recovery not yet complete
    • Yellen says increases in federal funds rate target likely would occur sooner and be more rapid than currently envisioned if labor market continues to improve more quickly than anticipated by FOMC
    • Yellen says FOMC believes high degree of monetary policy accommodation remains appropriate
    • Fed's balance sheet to hit $4.5 trillion when bond-buying likely ends in October - fed monetary policy report
    • Use of fed funds to control interest rates "will not be feasible" during policy normalization - fed monetary policy report
    • Yellen says prices for real estate, equities and corporate bonds have risen appreciably but remain generally in line with historical norms
    • Yellen says too many Americans remain unemployed, inflation remains below fed's long-run objective and necessary financial reforms remain incomplete
    • Yellen says housing sector has recovered notably but activity has leveled off and readings this year continue to be disappointing
    • Yellen says significant slack remains in labor markets, highlighted by the continued slow pace of growth in most measures of hourly compensation
    • Yellen says most FOMC participants project that total and core inflation will be between 1.5 percent and 1.75 percent for this year as a whole
    • Yellen says "considerable uncertainty" surrounds FOMC's projections for economic growth, unemployment and inflation
    • Yellen says FOMC participants currently judge these risks to be nearly balanced but warrant monitoring in months ahead

    10yr yields are now down 1.81bps on the day to 2.53 and Fannie 3.5s are up 2 ticks at 102-06.

    Category: MBS, UPDATE
    Share:   
  • 7/15/14

    Retail Sales

    • June Retail Sales +0.2 vs +0.6 forecast
    • May revised to +0.5 from +0.3
    • Excluding Autos +0.4 vs +0.5 forecast, May revised to +0.4 from +0.1
    • Excluding Autos/Building Materials/Gas, +0.6 vs +0.5 forecast, May revised to +0.2 from 0.0

    Empire State Manufacturing

    • 25.60 vs 17.0 forecast, 19.28 last month
    • Employment Index 17.05 vs 10.75 previously

    Import/Export Prices

    • Import Prices +0.1 vs +0.3 forecast
    • Export Prices -0.4 vs +0.2 forecast

    At face value the 0.2 vs 0.6 miss in Retail Sales should be a strong positive for bond markets, yet MBS and Treasuries are now moving into slightly weaker territory. 

    The counterpoints to the stronger Retail Sales headlines lie in the reports internals.  First off, the components (that stuff that "excludes" other stuff like autos or gas or building supplies or all three) was stronger than expected.  Additionally, May's numbers were revised higher across the board--in some cases significantly. 

    With the Empire State Manufacturing index also coming in stronger than expected, there's a strong enough case against bond markets for now, but markets may avoid getting too carried away before the 10am Yellen testimony.

    Fannie 3.5s are currently down 4 ticks at 102-02 and 10yr yields are up a bp at 2.556.

    Category: MBS, UPDATE
    Share:   
 
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