At A Glance

  • CC's down 7 ticks to 100-05 on Income and Outlay report
  • Why Down?  Core PCE up .3% versus consensus of .2%. 
  • Incomes up .1% versus -.2% consensus.  Spending up .6% versus .4% consensus (tax rebates a factor)
  • Construction Spending will arrive at 7AM.
  • Stock futures pointing slightly down
  • Technicals
    • Several methods show the 100-05 level as a floor of support.  Indeed, after this AM's sharp downtick, the curve has paused (at least for now), right at that level. 
    • These same techs show potential for a good week, though everyone else's favorite, candlesticks, are pointing to a down day.
  • LOCK/FLOAT;
    • floating for now. we'll let you know if we slip much from this current floor. 
    • For now, UST's and MBS are "trackin'." 
    • But as always stay tuned for potential intraday changes

abbreviations guide (ongoing list): 
  • CC's
    • Current Coupons.  Basically it's whichever coupon in the FNMA 30 yr fixed stack that happens to be the most liquid or closest to par.
  • Choppy
    • refers the the prices of MBS vacillating wildly (big differences between highs and lows and lots of back and forth in between). 
  • MBS -                 
    • Mortgage Backed Security
  • MDPC-
    • Mid Day Price Change (plus means for the better, minus for the worse)
  • DOW or DJIA -    
    • Dow Jones Industrial Average
  • Ticks-                   
    • 1/32nds of bond pricing.  8 ticks=8/32nds=.25 in cost (YSP or discount)
  • DoD, YoY, MoM-  
    • Day over day, year over year, month over month, etc..
  • O/N-                   
    • Overnight
  • Coupon-               
    • The "interest rate' of the MBS
  • 6.0's, 5.5's           
    • always means FNMA 30yr Fixed MBS with a coupon of that number.  6.0's = 6.0% coupon rate MBS
  • PCE-                    
    • Personal Consumption Expenditures, a component of the Income and Outlay report and one of the Fed's preferred inflation indicators
  • UST-                    
    • United States Treasury Bonds.  5UST = 5 year, 10UST = 10 year, etc.. 
  • NAPM (PMI)         
    • National association of purchasing management (Purchasing Manager's Index)
  • ISM (MFG)           
    • Institute for Supply Management (mfg: manufacturing)
  • Wide/Gap/Gappy  
    • refers to the wideness or gap between treasury yields and MBS yields.
  • "Going Out"          
    • 4:45PM EST.  Official Close is 3pm EST 
  • FI                        
    • "fixed income."  For our purposes, will simply refer to treasuries and MBS 
  • NFP                    
    • Non-Farm Payrolls.  Key part of employment report.  Most meaningful gauge of labor market
  • ADP                    
    • ADP private payrolls, some feel a precursor to NFP, but historically quasi-accurate at best.
  • GSE
    • Government Sponsored Enterprise.  Refers to Fannie Mae and Freddie Mac
  • PPI
    • Producer Price Index. A key inflation indicator. 
  • CPI
    • Consumer Price Index.  An even more key inflation indicator.