Little has changed for MBS and Treasuries following this morning's Jobless Claims numbers. The slightly weaker report helped bond markets add on to moderate overnight strength in slightly-above-average volume. As the minutes tick by, we're getting more and more confirmation that we're indeed back in the "old school" range between 1.80 and 2.10 in terms of 10yr yields. While 10's might have quite a bit further to go before hitting 1.80, Fannie 3.5 MBS at 103-22, are within striking distance of all-time highs in the low 104's. We're not saying that's going to happen today or soon, just commenting on the relative strength of MBS following yesterday's FOMC events and in general. Next calendar item of interest: 7yr Treasury Note Auction at 1pm.
MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing
is available via MBS Live.
Pricing as of 11:08 AM EST
Morning Reprice Alerts and Updates
Below is a recap of instant Reprice Alerts
and updates issued via email and text alert to MBS Live subscribers
NAR: March Pending Home Sales Rise, Market Recovering
Pending home sales increased in March and are well above a year ago, another signal the housing market is recovering, according to the National Association of RealtorsÒ.
The Pending Home Sales Index,* a forward-looking indicator based on contract signings, rose 4.1 percent to 101.4 in March from an upwardly revised 97.4 in February and is 12.8 percent above March 2011 when it was 89.9. The data reflects contracts but not closings.
The index is now at the highest level since April 2010 when it reached 111.3.
Lawrence Yun, NAR chief economist, said 2012 is expected to be a year of recovery for housing. “First quarter sales closings were the highest first quarter sales in five years. The latest contract signing activity suggests the second quarter will be equally good,” he said.
“The housing market has clearly turned the corner. Rising sales are bringing down inventory and creating much more balanced conditions around the county, which means home prices will be rising in more areas as the year progresses,” Yun said.
Freddie Mac: Fixed Mortgage Rates Hold Near Record Lows
30-year fixed-rate mortgage (FRM) averaged 3.88 percent with an average 0.7 point for the week
ending April 26, 2012, down from last week when it averaged 3.90 percent. Last year at this time, the
30-year FRM averaged 4.78 percent.
15-year FRM this week averaged 3.12 percent with an average 0.6 point, down from last week when
it averaged 3.13 percent. A year ago at this time, the 15-year FRM averaged 3.97 percent.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.85 percent this week,
with an average 0.6 point, up from last week when it averaged 2.78 percent. A year ago, the 5-year
ARM averaged 3.51 percent.
1-year Treasury-indexed ARM averaged 2.74 percent this week with an average 0.6 point, down
from last week when it averaged 2.81 percent. At this time last year, the 1-year ARM averaged 3.15
MBS Add Slightly To Overnight Gains Following Jobless Claims
Economically speaking, global financial markets were feeling a bit queasy overnight after the European Commission reported weaker Economic Sentiment, Industrial Climate, Consumer Sentiment, and Business Climate. Negative quarterly reports from banks as weak earnings from Deutsche Bank set stocks on the path lower, with bond markets picking up the pieces. European 10yr Benchmarks led Treasuries lower into the NY open with weaker-than-expected Jobless Claims continuing that mission.
10's are down 5bps at 1.937 and Fannie 3.5 MBS are up 9 ticks at 103-24. This brings MBS and Treasuries roughly in line with their recent strongest levels from the beginning of the week.
Next scheduled data on tap is Pending Home Sales at 10am, followed by scheduled Fed "Twist" buying from 10:15 to 11:00am (2036-2042 maturities). But perhaps the most interesting item left of today's calendar is the 7yr Treasury Note Auction at 1pm.
We're not so much interested in the result itself (unless it's shockingly different than previous examples) as much as we're interested to see what is the net effect of this week's auction cycle being over. In that sense, even an average auction could have salubrious effects on the rest of the trading day.
ECON: Jobless Claims "Fall Up" to 388k.
* Previous week revised higher to 389k from 386k
* So claims are "lower" (cough!) to 386k this AM
* Widely tracked 4-week average at 381,750, highest since January 7, 2012
In the week ending April 21, the advance figure for seasonally adjusted initial claims was 388,000, a decrease of 1,000 from the previous week's revised figure of 389,000. The 4-week moving average was 381,750, an increase of 6,250 from the previous week's revised average of 375,500.
The advance seasonally adjusted insured unemployment rate was 2.6 percent for the week ending April 14, unchanged from the prior week.
The advance number for seasonally adjusted insured unemployment during the week ending April 14 was 3,315,000, an increase of 3,000 from the preceding week's revised level of 3,312,000. The 4-week moving average was 3,311,750, a decrease of 9,750 from the preceding week's revised average of 3,321,500.
Live Chat Featured Comments
Matt Hodges : "we've seen this story before, many times - at least they are being "honest" about their problems"
Matthew Graham : "RTRS - ALLY FINANCIAL CEO MICHAEL CARPENTER SAYS LENDER HAS TO SEPARATE ITSELF FROM MORTGAGE ISSUES "
Matthew Graham : "RTRS - ALLY CEO: BANKRUPTCY IS OPTION FOR RESCAP MORTGAGE UNIT "
Matthew Graham : "Surprise news of the century (feel the sarcasm):"
Dan Clifton : "Andrew, sounds like when the CFPB starts looking, there will be some mortgage company owners heading to the big house"
Matthew Graham : "RTRS - U.S. 30-YR FIXED RATE MORTGAGES 3.88 PCT APRIL 26 WK VS 3.90 PCT PRIOR WK-FREDDIE MAC "
Matthew Graham : "RTRS- U.S. MARCH PENDING HOME SALES +12.8 PCT FROM MARCH 2011 "
Matthew Graham : "RTRS - U.S. MARCH PENDING HOME SALES INDEX +4.1 PCT (CONSENSUS +1.0 PCT) TO 101.4 - REALTORS "
Andrew Benson : "neither place seemed to know that that sort of setup was not really okay."
Andrew Benson : "... actually, they could do borrower or lender paid. in either case, the company kept a flat fee and they kept the rest."
Andrew Benson : "cs: that's interesting. I interviewed to LOs in the past two weeks. Both came from companies that were doing EXACTLY that."
Andy Pada : "CS, which organizations were the CFPB auditing?"
Christopher Stevens : "very focused on LO comp plans and how LO's choose rate/lender"
Christopher Stevens : "heard yesterday the the CFPB is out in force in CT doing some audits."
Andy Pada : "maybe, but maybe not. I have a game plan that involves a certain range and when that range hits 103-22, I'll buy. "
Victor Burek : "i think as the day progresses, you might regret that"
Andy Pada : "just locked in a bunch at my number"
Andy Pada : "they might, but looks like our markets can distill the correct message from the data"
Victor Burek : "bloomberg blaiming seasonal adjustments for the higher claims"
Jeff Anderson : "Ican't believe that they increased last wwek's number to show this week was lower. Weird. GM, all."
Victor Burek : "revised high enough to say claims fell"
Matthew Graham : "RTRS- US JOBLESS CLAIMS 4-WK AVERAGE HIGHEST SINCE MATCHING 381,750 IN WEEK ENDED JAN 7, 2012 "
Matthew Graham : "RTRS- US CONTINUED CLAIMS ROSE TO 3.315 MLN (CON. 3.295 MLN) APRIL 14 WEEK FROM 3.312 MLN PRIOR WEEK (PREV 3.297 MLN) "
Matthew Graham : "nope, they should just start adding 10k every time"
Ira Selwin : "not even funny any more"
Matthew Graham : "RTRS - US JOBLESS CLAIMS 4-WK AVG ROSE TO 381,750 APRIL 21 WEEK FROM 375,500 PRIOR WEEK (PREVIOUS 374,750) "
Matthew Graham : "RTRS - US JOBLESS CLAIMS FELL TO 388,000 APRIL 21 WEEK (CONSENSUS 375,000) FROM 389,000 PRIOR WEEK (PREVIOUS 386,000) "
Victor Burek : "claims going the wrong direction"