On this data-free Friday, domestic markets have been relegated to watching tradeflows after a more interesting overnight session. To that end, the first part of the night was negative for bond markets with more of "risk-on" tone out of Europe following a stronger IFO Business Climate survey as well as better-than-expected Retail Sales in Italy. But news that that the most recent installment of the ECB's LTRO (long term refinancing operation) repayments was less-than-expected helped reverse the weaker trend. This was primarily seen in German Bunds first, but domestic accounts have increasingly gotten on board with several block trades in 5yr futures leading the charge at 7:15am NY time. The rest of the morning has been a technically-driven grind back in line with yesterday afternoon's levels where we're currently encountering similar resistance before moving through 1.96 in 10yr yields. MBS are a bit more timid, and haven't made it back to 103-00 yet.
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 11:13 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 Unchanged After Opening Slightly Weaker
The European hours delivered in terms of providing plenty for overnight Treasuries to consider, even if that's more about following analogous European metrics like German Bunds. The yields of both moved higher at the start of the European session, helped along by stronger economic data out of Germany and Italy.
The selling was moderate and was completely reversed when the ECB released another installment of the LTRO repayments (the stuff that caused the big nasty sell-off on 1/25). This time it was lighter than expected, but not to such an extent that it reversed even a small portion of the sentiment created by 1/25.
MBS and Treasuries crossed into 8am at slightly weaker levels and had some sideways choppiness, driven by tradeflows, but which has now resolved itself with a move back toward unchanged levels. Fannie 3.0s are currently up 1 tick at 102-29 and 10's are +0.0018 as we wait to see if the cash open for stocks will have any input on this otherwise data-free US session.
Live Chat Featured Comments
Tim Mitchell : "that's what i thought, thanks Jason"
Jason York : "the only thing he won't have is the VA Funding Fee, nothing changes for closing costs"
Tim Mitchell : "well it's 100% financing, he's been reading that as a disabled vet he won't have any closing costs, i was trying to get him to bump the purchase price 3k to cover fees"
Jason York : "what do you need?"
Tim Mitchell : "Is anyone in here good a VA Purchase? i do a lot of IRRRL's but very few purchases and my buddy is buying a house"
Brent Borcherding : "It's just further "proof" that the Fed isn't going anywhere."
Brent Borcherding : "I know, exactly."
Andrew Horowitz : "Brent if you take out the Fed "actions" over the past couple of years you would more than likely have had neg growth "
Brent Borcherding : "" ROSENGREN ESTIMATES $750 BLN IN ASSET BUYS TRANSLATE TO 1.6 PCT GAIN IN REAL GDP, "....... SO, without Fed asset purchases we have, what, for real growth?"
Scott Valins : "yes BC worse pricing"
Ray J : "so we need another 3T in asset purchases meow to reduce UE by another 1.0%...?"
Matthew Graham : "RTRS- ROSENGREN ESTIMATES $750 BLN IN ASSET BUYS TRANSLATE TO 1.6 PCT GAIN IN REAL GDP, REDUCE UNEMPLOYMENT BY 0.25 PCT"
Matthew Graham : "RTRS - ROSENGREN SAYS ASSET PURCHASES HAVE IN PART HELPED LOWER LOAN RATES ON MORTGAGES, AUTOS "
Matthew Graham : "RTRS- ROSENGREN: ASSET PURCHASES BOOST GROWTH, PRODUCE MORE TAX REVENUE FOR U.S., REDUCE GOVT ENTITLEMENT EXPENDITURES"
Matthew Graham : "RTRS - FED'S ROSENGREN SAYS UNEMPLOYMENT WOULD LIKELY BE HIGHER, AND INFLATION LOWER, ABSENT LARGE-SCALE ASSET PURCHASES"
B-C : "anyone seeing worse pricing than yesterday?"
Ted Rood : "Unless I am worried about the potential for the deal to fall out (or if we're improving), I'll lock at app. If borrower is happy, I really don't want to have to sell them again a day later with $1000 less in lender paid costs. Rather have a little fall out for unreturned docs than a LOT for loans lost due to pricing changes."
Victor Burek : "i never lock at application, only when docs are back from client with documentation"
Matt Hodges : "it would seem there's some angst about rates out there... i'd suggest locking at application, in that instance"
Matthew Graham : "RTRS- PIMCO'S GROSS SAYS FED HAS NOT BEEN VIGILANT ON THE QUANTITATIVE EASING POLICIES OF OTHER CENTRAL BANKS -CNBC"