Euros surged in the early AM, setting the tone for Treasuries and equities, which looked willing to head in either direction until then. Domestic traders agreed when they got in for the day with quick but moderate bout of snowball selling and equities futures buying. Comments from a G7 official made for a quick pop in the Yen and helped bond markets find their footing temporarily. Equities took over as the directional guidance giver of choice after the opening bell, and found their own footing with help from the Euro's ratcheting movements higher.
Scheduled Fed Treasury purchases didn't cause any drama from bond markets at the conclusion of the 11am operation, but neither do bond markets seem especially inspired by any one thing. MBS have been calm, slightly weaker, and sideways just over 103-00, still holding intermediate support, but any further weakness is a potential break lower.
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
Volume Returns This Morning. Bond Markets Weaker
The balance of overnight trading is now rendered mostly inconsequential next to the early domestic session tradeflows. Plenty happened overnight, but none of it was significant, and none of it moved 10yr yields outside a super narrow 1.95-1.97 range.
That changed abruptly around 8:20am as volume returned to bond markets with a vengeance (relative to yesterday). To put that in perspective, the first hour of trade this morning looks to be on pace with those seen on 2/7 and 2/8. The problem is that the flows are all sellers, or they were until about 8:52am.
Since then, a second wave of big trades has hit screens in Treasury futures and yields moved down a quick bp from the earlier highs of 1.982. Rather than stand out as a fundamental change in direction, these look like fast money accounts having a field day in the newly renovated playground afforded by the increased volume this morning. Long story short, this is a small-sized snowball in the big picture, but feels big relative to the past two sessions.
10's are currently hanging in at 1.977, with the most recent wave of volume looking more consolidative than anything. It stands a chance to be a supportive bounce considering equities futures bounced near yesterday's wee hour highs of 1516 in S&P futures and that this morning's 1.982 high in 10's is strikingly similar to yesterday's early high at 1.981, but flows have been too volatile to say that definitively.
Against all this drama in the Treasury complex, MBS have been the "little engine that could," with Fannie 3.0's currently down only 1 tick on the day at 103-02. Not only that, but MBS held their ground with a relatively high degree of composure compared to the whipsaw in broader markets. Fingers crossed for continued ground-holding here in Treasuries, which could allow further relative improvements for MBS. The stock lever has been fairly well-connected this AM, so the 9:30am opening bell is a focal point considering the lack of econ data.
Live Chat Featured Comments
Christopher Max : "HARP Loan with loan mod? Any suggestions? I know Fannie allows it but I can only find 360 mortgage and they do not lend in New England. Overlays are so much fun"
Matthew Graham : "RTRS - ECB'S DRAGHI SAYS ECB AWARE EXCHANGE RATES ARE AS IMPORTANT FOR GROWTH AS FOR PRICE STABILITY "
Victor Burek : "the wolf is at the door...laughable"
Matthew Graham : "RTRS - PENTAGON WOULD HAVE TO FORCE MOST CIVILIAN EMPLOYEES TO TAKE 22 DAYS OF UNPAID LEAVE, SAVING ABOUT $5 BLN - CARTER "
Matthew Graham : "RTRS- ACROSS-THE-BOARD CUTS UNDER SEQUESTRATION WOULD UNDERMINE NEW DEFENSE STRATEGY - CARTER TELLS U.S. SENATE PANEL IN PREPARED REMARKS "
Matthew Graham : "RTRS - U.S. DEPUTY SECRETARY ASHTON CARTER SAYS 'DEVASTATING' CUTS NO LONGER A DISTANT THREAT - 'THE WOLF IS AT THE DOOR' "
Matthew Graham : "RTRS- DEPUTY DEFENSE CHIEF URGES U.S. CONGRESS TO DELAY $46 BLN IN BUDGET CUTS DUE TO HIT PENTAGON STARTING MARCH 1 "
Ted Rood : "'s definitely a way to show my competance. Closed a 625K loan because of MND yesterday!"
Ted Rood : "Just a word to all LO's here: If you don't have a profile set up, and don't email your clients with MG's excellent daily rate updates and/or anything else from this site, you're losing a valuable opportunity. I send my profile to prospective clients, and it"
Brett Boyke : "http://www.cnbc.com/id/100450482"
Victor Burek : "with stocks at 5 year highs, hoping the odds are in our favor"
Matt Hodges : "stored energy continuing to build"
Andy Pada : "I agree VB. "
Victor Burek : "sure does seem the markets are all just waiting on something"
Victor Burek : "think he is referring to the chart being at the top of screen with lots of room below"
Matt Hodges : "i don't follow you, AP... looks like with no economic data the market is looking for direction, maybe from equities"
Andy Pada : "Ew...what's up with the morning chart set up for a drop?"