MBS struggled a bit this morning--to whatever extent a supportive bounce at 105-00 in Fannie 3.0s could be considered struggling (considering that's higher than the entire 2nd half of October and most of November-- but found their footing in the 9am hour. They've since turned positive on the day, up 4 ticks now at 105-08 while the longer end of the yield curve is still struggling with significantly more day-over-day weakness. Stocks are generally flat to slightly weaker today, but well within yesterday afternoon's range and both sides of the market seem to be gathering a bit of sideways momentum now as they continue to move away from the big swings surrounding the election. With that in mind, it makes sense that economic data and events have had much less to do with what little movement we've seen so far today. Tradeflows and positioning have been the bigger factors and there's been a bit of a battle between various account types, ultimately resulting in the mostly sideways momentum, perhaps with an eye on the three-day weekend ahead.
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 11:07 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
Bond Markets Moderately Weaker. Data, Draghi Underwhelming
It's somewhat of an interesting morning so far with the usual suspects having done surprisingly little to move markets. Those "suspects" include economic data and the press conference with ECB Pres Mario Draghi following the ECB's decision to keep rates unchanged earlier this morning (as expected). Draghi dropped no tape bombs in the press conference and markets haven't moved much at all from opening levels.
That also means that the stronger-than-expected Jobless Claims and narrower-than-expected Trade Deficit were of little consequence to bond markets, with the former most easily discounted due to Hurricane Sandy-related data distortions.
Instead of a discernible connection to data or events, bond market movements have been more driven by tradeflows in an ongoing "leveling-off" process following yesterday morning's big election-driven rally, as well as a need to be in position for this afternoon's 30yr Auction.
10yr yields are about 4.5 bps higher this morning, but not back into Tuesday's range. Still, 10's are pushing 1.69 at the moment, which is a technical support level of some importance. If 10's break above 1.69 with any meaningful momentum, we'd expect to see some spillover into MBS.
As for their part, MBS are doing their best to hang tough this AM with Fannie 3.0s down only 1 tick at 105-04 presently after having dipped to 105-01 earlier. There's no other scheduled data this morning, which leaves the door open for some concern about the stock market rally that is underway since the 9:30am cash open. For now, bond markets look to be holding their ground reasonably well and not overly keen to take part in a unified "risk-on" move before the Fed's Twist buying from 10:15-11:00am. There's probably a breaking point there if things get too heated, and it's coming up fairly soon if stocks break yesterday's afternoon highs.
ECON: September Trade Deficit Narrowest Since Since Dec 2010
- Trade gap shrinks to $41.55 bln from $43.79 bln previously
- Consensus was $45.0 bln
The U.S. Census Bureau and the U.S. Bureau of
Economic Analysis, through the Department of Commerce,
announced today that total September exports of $187.0
billion and imports of $228.5 billion resulted in a goods and
services deficit of $41.5 billion, down from $43.8 billion in
August, revised. September exports were $5.6 billion more
than August exports of $181.4 billion. September imports
were $3.4 billion more than August imports of $225.2 billion.
In September, the goods deficit decreased $1.4 billion
from August to $57.5 billion, and the services surplus
increased $0.8 billion from August to $15.9 billion. Exports
of goods increased $5.4 billion to $134.0 billion, and imports
of goods increased $3.9 billion to $191.5 billion. Exports of
services increased $0.3 billion to $53.0 billion, and imports of
services decreased $0.6 billion to $37.1 billion.
The goods and services deficit decreased $2.9 billion
from September 2011 to September 2012. Exports were up
$6.4 billion, or 3.5 percent, and imports were up $3.4 billion,
or 1.5 percent.
ECON: Jobless Claims Lower Than Expected, Distorted By Storm
- Claims 355k vs 370k Consensus, 363k Previous
- Continued Claims Lowest Since July 2008
- Labor Department Says Superstorm Sandy boosted claims in some states and depressed claims in at least one state.
In the week ending November 3, the advance figure for seasonally adjusted initial claims was 355,000, a decrease of 8,000 from the previous week's unrevised figure of 363,000. The 4-week moving average was 370,500, an increase of 3,250 from the previous week's unrevised average of 367,250.
The advance seasonally adjusted insured unemployment rate was 2.4 percent for the week ending October 27, a decrease of 0.1 percentage point from the prior week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending October 27 was 3,127,000, a decrease of 135,000 from the preceding week's revised level of 3,262,000. The 4-week moving average was 3,227,750, a decrease of 38,500 from the preceding week's revised average of 3,266,250.
Live Chat Featured Comments
Jeff Anderson : "Leadership at it's finest. Sounds familiar. :)"
Matthew Graham : "RTRS- DRAGHI - ASKED WHETHER WOULD LIKE FOR SPAIN TO ASK FOR AID, SAYS UP TO SPAIN "
Jeff Anderson : "Did not discuss what they'll do next year? Umm, it's 6 weeks till next year? Really?"
Gus Floropoulos : "profit taking"
Matthew Graham : "RTRS- DRAGHI -DID NOT DISCUSS WHAT WILL DO NEXT YR "
Victor Burek : "draghi starting press conference"
Matthew Graham : "RTRS- US SEPT TRADE DEFICIT NARROWEST SINCE DEC 2010 "
Matthew Graham : "RTRS - US SEPT TRADE DEFICIT $41.55 BLN (CONSENSUS $45.0 BLN) VS AUG DEFICIT $43.79 BLN (PREV $44.22 BLN) "
Matthew Graham : "RTRS - US LABOR DEPT ANALYST SAYS SUPERSTORM SANDY BOOSTED CLAIMS IN SOME STATES, DEPRESSED CLAIMS IN AT LEAST ONE STATE "
Matthew Graham : "RTRS - US CONTINUED CLAIMS LOWEST SINCE WEEK ENDED JULY 12, 2008; INSURED UNEMPLOYMENT RATE LOWEST SINCE JULY 26, 2008 WEEK "
Oliver S. Orlicki : "going to buy my ticket now"
Matthew Graham : "RTRS- US CONTINUED CLAIMS FELL TO 3.127 MLN (CONS. 3.253 MLN) OCT 27 WEEK FROM 3.262 MLN PRIOR WEEK (PREV 3.263 MLN) "
Matthew Graham : "RTRS- US JOBLESS CLAIMS FELL TO 355,000 NOV 3 WEEK (CONSENSUS 370,000) FROM 363,000 PRIOR WEEK (PREVIOUS 363,000) "
Victor Burek : "play the lottery oliver"
Oliver S. Orlicki : "guessing 355"