It's happened before and it will happen again in all likelihood, it will happen again. ECB meetings tend to fall on the first Thursday of the month, meaning that the post-announcement press conference is getting underway right at the same time Jobless Claims hits and exactly 24 hours before the most important piece of domestic economic data each month. In an era where markets are balancing the considerations of waning European tail risk vs a potentially stabilized, grinding improvement in the domestic economy all against the backdrop of a rising rate environment, relatively large moves are to be expected. Draghi didn't drop any bombs, but wasn't at all "interest rate friendly" (i.e. no hint of stimulus, generally more upbeat than previous press conferences). Combined with Jobless Claims beating estimates, it causes some legitimate fear about being on the wrong side of the trade tomorrow. Incidentally, that fear was already playing out as bond markets stepped into the week at their best levels in over a month and quickly asked themselves "what are we thinking?!?" The last 4 days has been a sober sort of mad-dash back toward more nimble levels with respect to shorter-term uptrend (whereas Monday was the byproduct of returning to a nimble position in the longer term uptrend to guard against the possibility that the Italian election drama would cause more damage). In the event of a negative reaction tomorrow, the most important defensive wall for bond markets is near 2.05% in terms of 10yr yields. Any sustained break above that is a firm confirmation of the longer term uptrend.
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 4:07 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
Several Negative Reprices Reported. Still holding Support
Fannie 3.0s are still hanging on to their lows from the morning hours that prompted the original reprice alert--12 ticks weaker vs yesterday at 102-26. Into the 1pm hour, MBS looked almost willing to start heading the other direction, but never made it off the ground. Since then, they've stayed locked in a 102-26 to 102-29 range while Treasuries grind microscopically higher in yield (all PM movement in 1.5bp range).
Despite holding ground in terms of MBS, 2 lenders have repriced for the worse in the past 20 minutes, suggesting the possibility that others who forewent a reprice this morning might still be lurking (or just hedging a bit more ahead of tomorrow's NFP and Fannie/Freddie 30yr Fixed Roll in MBS).
Live Chat Featured Comments
MC : "REPRICE: 3:26 PM - Flagstar Worse"
Sloan Davis : "REPRICE: 3:14 PM - Sierra Pacific Worse"
Joe Daquino : "http://trimtabs.com/blog/2013/03/06/trimtabs-reports-u-s-economy-adds-100000-jobs-in-february/ "
Jason York : "800-848-9136"
Bryce Schetselaar : "anyone have a good chase payoff number?"
B-C : "feb. of 2012 259k jobs were added, by April it was 68k"
Victor Burek : "brent, here is that trimtabs showing their est compared to nfp, http://trimtabs.com/blog/2013/01/30/trimtabs-estimates-u-s-economy-adds-135000-155000-jobs-in-january-impact-of-bonus-shifting-makes-our-estimate-more-difficult-to-make-than-usual-for-second-consecutive-month/"
Oliver S. Orlicki : "right now everything from a data point in the us has been at or above consensus. Until that data disappoints, it does not matter what is going on in europe IMO. Individual investors are beginning to pour money into the market hoping to ride this rally"
Matt Hodges : "heard a report this morning - companies are doing quite well selling to emerging markets, using fewer workers due to automation and efficiencies... maybe we'll never get back to 400,000+ jobs created per month"
Victor Burek : "the next ecb meeting, looks like new elections in Italy, but that coudl be months away, i think europe is gonna be more about tape bombs, unexpected things that happen"
Brandon Blue : "seems like Italy gave us a nice little dip in an otherwise increasing market for the foreseeable future, no?"
Matt Hodges : "whoa, Victor - bold"
Oliver S. Orlicki : "I think it will get worse tomorrow. NFP is going to be above 200K"
Victor Burek : "if nfp tomorrow is better, we will probably have more red, worse, we will probably see some green"
Brandon Blue : "Gentlemen, debating locking some new loan apps.....are we expecting more red blood tomorrow? thx"
Matthew Graham : "haven't stocks been "due for a correction" since August?"
Gus Floropoulos : "20 bps range within the 10 yr. in the higher end of the range. As long as e don't break through 2.05 we're in good shape. Add stock mkt due for correction and possible headline risks brewing"
Andy Pada : "and we've haven't broken our range."
Andy Pada : "I just think it is top part of our range."
Brett Boyke : "I know that because the skittles dispensing unicorn told me"
Brett Boyke : "this time is different"
Andy Pada : "I feel like we've been down this road twice and gone back."
John Rodgers : "what if we don't get back ther"