MBS Live: MBS Morning Market Summary
Trading has been predictably slow and uneventful as market participants are in housekeeping mode thanks to an early close today and a complete closure tomorrow. Bond markets began the day in stronger territory after both Asian and European hours contributed to a slight drift lower in yield. MBS opened up a few ticks higher than Friday's close and made additional gains from there, ultimately leveling off before hitting 105-00 in Fannie 3.0s. Fed purchase and sale operations for Treasuries and purchases of MBS are postponed tomorrow and best we can tell, there will be no dollar-denominated bond market trading.
MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
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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 this morning.
9:08AM :
ALERT ISSUED:
Bond Markets In Better Territory To Begin Shortened Session
Bond markets, including MBS, will close at 12:00pm Eastern Time today due to Hurricane Sandy. The overnight session and morning trading has been almost exclusively positive, if mildly so with weaker equities in Asia getting things kicked off in a friendly direction. "Risk-Off" headlines out of Europe contributed to the steady decline in stock prices and equity yields in the second half of the overnight session.
Stock futures have bounced slightly as the domestic session gets underway after better-than-expected consumer spending, but bond markets extended gains nonetheless. MBS opened the morning in slightly better territory and have since moved up 7 ticks to 104-29.
The balance of the morning is uncertain given the thinly staffed trading desks. Lower participation/volume can naturally lead to higher volatility/uncertainty as it takes fewer dollars to move prices. So far this morning, that fact has worked in bond markets' favor, but the next 3 hours are anyone's guess.
Stock futures have bounced slightly as the domestic session gets underway after better-than-expected consumer spending, but bond markets extended gains nonetheless. MBS opened the morning in slightly better territory and have since moved up 7 ticks to 104-29.
The balance of the morning is uncertain given the thinly staffed trading desks. Lower participation/volume can naturally lead to higher volatility/uncertainty as it takes fewer dollars to move prices. So far this morning, that fact has worked in bond markets' favor, but the next 3 hours are anyone's guess.
8:41AM :
ECON: Incomes As Expected While Spending Beats Consensus
- Personal Income +0.4 vs +0.4 consensus
- Personal Spending +0.8 vs +0.6 consensus
- Core PCE Price Index +0.1 pct vs +0.1 pct consensus
Personal income increased $48.1 billion, or 0.4 percent, and disposable personal income (DPI) increased $43.0 billion, or 0.4 percent, in September, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $87.9 billion, or 0.8 percent. In August, personal income increased $17.8 billion, or 0.1 percent, DPI increased $15.1 billion, or 0.1 percent, and PCE increased $59.9 billion, or 0.5 percent, based on revised estimates.
Real disposable income decreased less than 0.1 percent in September, compared with a decrease of 0.3 percent in August. Real PCE increased 0.4 percent, compared with an increase of 0.1 percent.
Real PCE -- PCE adjusted to remove price changes -- increased 0.4 percent in September, compared with an increase of 0.1 percent in August. Purchases of durable goods increased 1.3 percent, compared with an increase of 1.5 percent. Purchases of nondurable goods increased 0.5 percent, compared with an increase of 0.4 percent. Purchases of services increased 0.2 percent, in contrast to a decrease of 0.2 percent.
- Personal Spending +0.8 vs +0.6 consensus
- Core PCE Price Index +0.1 pct vs +0.1 pct consensus
Personal income increased $48.1 billion, or 0.4 percent, and disposable personal income (DPI) increased $43.0 billion, or 0.4 percent, in September, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $87.9 billion, or 0.8 percent. In August, personal income increased $17.8 billion, or 0.1 percent, DPI increased $15.1 billion, or 0.1 percent, and PCE increased $59.9 billion, or 0.5 percent, based on revised estimates.
Real disposable income decreased less than 0.1 percent in September, compared with a decrease of 0.3 percent in August. Real PCE increased 0.4 percent, compared with an increase of 0.1 percent.
Real PCE -- PCE adjusted to remove price changes -- increased 0.4 percent in September, compared with an increase of 0.1 percent in August. Purchases of durable goods increased 1.3 percent, compared with an increase of 1.5 percent. Purchases of nondurable goods increased 0.5 percent, compared with an increase of 0.4 percent. Purchases of services increased 0.2 percent, in contrast to a decrease of 0.2 percent.
Live Chat Featured Comments
A recap of the featured comments from the MBS Live Dashboard's Live Chat feature, utilized by hundreds of industry professionals each day.
Matt Hodges : "even though it's not raining much right now, my appraiser would not go out for a final today, or likely tomorrow. Fortunately, clients have their rental through Wednesday"
Adam Dahill : "just cancelled my closings for today and tomorrow. I was trying to convince the title closer to make it happen then I realized I was being a jerk and god forbid he got into a accident for a stupid refi"
MMNJ : "I do not disagree with the policy whatsoever -- last thing we want is a bunch of 80LTV loans with no capacity to live there"
Ira Selwin : "Even if not declared, wont want to close them if the house isnt there"
MMNJ : "we just canceled all purchase closings for this week that are in the projected path -- cannot close until a reinspection is done, which means earliest they can be done is Wed / Thu"
Ira Selwin : "it's beyond the declared areas. It's protecting your own collateral. "
Michael Gillani : "Keeping my fingers crossed for all you east coast guys that the storm doesn't live up to expectations and there are no disaster areas declared by FEMA!"
Daniel Kramer : "re-certs are quick, it is mor elike there wil be a big backlog of orders coming in that will take time to get thru. they just need appriaser to go to house, walk around it, and make sure there isnt a tree sticking out of the house"
MMNJ : "Hodgy, I would order the inspections today (AMC's are going to get pummeled with these, so the earlier the better). the storm is 1,000 miles wide"
Daniel Kramer : "state of nj alreqady declared a state og emergency, 100% lenders wil be askign for re0certs on all appraisals done prior to this week, for all closing necxt week and onward"
Matt Hodges : "i have five closings on Thurs/Fri - really hoping we don't get hit with a disaster area designation"
MMNJ : "we are requiring exterior inspections on all loans not closed effective today on any areas potentially in the path. Last thing we want is a post closing repurchase issue"
Ross Miller : "FEMA in many cases will declare disaster areas in areas that had minimal damage so the county can request federal assistance so they have a far reach."
Ross Miller : "To all who are about to be effected by Hurricane Sandy, Be sure to review your lenders disaster review policies. Once the county is declared a disaster area by FEMA every home that has been appraised but has not closed will have to be reinspected. You need to find out if a home inspector is allowed or if it has to be the original appraiser. You wil also have to redisclose to all the customers as well so that your appraisal costs are in line and it is an acceptable coc reason. "
Jude Bridwell : "GM all. Prayers sent to all of you in the Northeast. Been thru many hurricanes in Louisiana, nothing to mess around with. Stock up on essentials and be safe"
Matthew Graham : "RTRS- CHICAGO MIDWEST MANUFACTURING INDEX AT 93.4 IN SEPTEMBER VS REVISED 93.8 IN AUGUST "
Matthew Graham : "RTRS- US SEPT CORE PCE PRICE INDEX +0.1 PCT (CONS +0.1 PCT) "
Matthew Graham : "RTRS - US SEPT PERSONAL SPENDING +0.8 PCT (CONSENSUS +0.6 PCT) "
Matthew Graham : "RTRS - US SEPT PERSONAL INCOME +0.4 PCT (CONSENSUS +0.4 PCT) "
Andrew Horowitz : "80 here:-("
Matt Hodges : "calling for about 60mph here"
Steven Fishman : "they are calling for 70MPH winds and rain here in Ohio starting at noon."
MMNJ : "drive to office was no problem, but wind / rain really starting to get dicey"
Victor Burek : "no stocks trading, so maybe everyone will just buy mbs"
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