Today's headlines generally erred on the site of optimism for some sort of stop-gap Fiscal Cliff agreement and Treasuries began taking their lumps early and often. 10yr yields came in the door just under 1.7 but went out in the mid 1.75's. In terms of price, that was a 16 tick loss for 10yr Treasuries. Contrast this to Fannie 3.0 MBS, which hit the 2pm early close a scant 3 ticks lower at 104-25 and the outpeformance is clear. There was no relevant economic data released during today's shortened session, and as-expected, the market was exclusively focused on the on-again/off-again Fiscal Cliff hijinks that played out in various speeches from political leaders. This ultimately ended with the news that the House isn't likely to vote on a mini-deal by midnight--news conveniently timed about 3 minutes after stock markets closed. It's no real bombshell, however, as futures markets are still open and didn't manifest a panicked reaction. It's also not a bombshell because it's no surprise that things don't happen efficiently, smoothly, as-expected, or as-promised in Washington. Fiscal-Cliff dealings have been a nauseating reminder of that fact. NOTE: BOND MARKETS ARE CLOSED FOR NEW YEARS DAY TOMORROW. Normal trading hours will resume on Wednesday morning.
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 2:08 PM EST
Afternoon Reprice Alerts and Updates
Below is a recap of instant Reprice Alerts
and updates issued via email and text alert to MBS Live subscribers
MBS Close Mid-Range, Stocks Rally On Tax Agreement
Bond markets are closed as of 2pm EST with the exception of a few errant last-minute trades. Those were of little consequence and fell well within the tight central trading range for MBS between 104-24 and 104-28 in Fannie 3.0s. Treasuries fared worse by comparison--as is typically the case for headline-driven "risk-on" or "risk-off" swings.
After coming in the door under 1.7, 10yr yields hit the 2pm mark just over 1.75. If markets were still open, yields would be closer to 1.80 according to futures prices, following recent headlines from the Senate floor. Mitch McConnell noted that talks with Vice President Biden were "successful" and that agreements had been reached on all tax issues.
S&P's rose roughly 10 points since 2pm and 10yr Treasury futures prices shed 9/32nds in the same time, a move that would equate to around 3 basis points of movement in normal, liquid markets. But with much of the market closed and volume lower-than-normal to begin with, there's no way to know where markets would otherwise be trading these events.
Live Chat Featured Comments
Matthew Graham : "RTRS - OBAMA SAYS "GRAND BARGAIN" WAS TOO MUCH TO HOPE FOR WITH CURRENT CONGRESS, MAY BE ABLE TO SOLVE THE PROBLEM IN STEPS "
Andy Pada : "I think maybe that is what Pres. Obama will talk about at 1:30"
Jason Wilborn : "some patch work deal at the very last moment"
Matthew Graham : "RTRS - "Senate Democrats had not yet expressed positions on the emerging deal.""
Matthew Graham : "Reuters says "a majority of Senate Republicans are expected to support a tentative deal" in reference to the details below"
Andy Pada : "Is this being brought up for a vote in the Senate?"
Andrew Horowitz : "good stuff MG, now we can move on to the pending debt ceiling battle"
Matthew Graham : "RTRS - FISCAL DEAL WOULD EXTEND CHILD TAX CREDIT, EARNED INCOME TAX CREDIT, AND COLLEGE TAX CREDIT FOR FIVE YEARS - SOURCE "
Matthew Graham : "RTRS- STICKING POINT IN FISCAL DEAL IS ON SEQUESTER DELAY; WHITE HOUSE SEEKING DELAY FOR A FULL FISCAL YEAR - SOURCE FAMILIAR WITH TALKS "
Matthew Graham : "RTRS - FISCAL DEAL WOULD INCLUDE PERMANENT EXTENSION OF MIDDLE CLASS TAX CUTS - SOURCE"
Matthew Graham : "RTRS - FISCAL DEAL POSTPONES SEQUESTER, WOULD INCLUDE SOME $600 BILLION IN REVENUE -SOURCE FAMILIAR WITH TALKS "
Matthew Graham : "RTRS - FISCAL DEAL WOULD INCLUDE PERMANENT ALTERNATIVE MINIMUM TAX FIX, EXTEND UNEMPLOYMENT INSURANCE BENEFITS FOR ONE YEAR - SOURCE "
Matthew Graham : "RTRS - EMERGING "FISCAL CLIFF" DEAL WOULD RAISE TAX RATES FOR INDIVIDUALS WITH INCOME ABOVE $400,000 A YEAR AND HOUSEHOLDS ABOVE $450,000 A YEAR - SOURCE FAMILIAR WITH TALKS "
Victor Burek : "sen bachus said getting real close to a deal"