Treasuries rallied overnight in rather underwhelming fashion. Volume was moderate and the trading range was fairly narrow. Yesterday's weak NFP reading clearly suggested an adjustment lower in yield, but the implied, almost audible question at the moment seems to be "now what?" The next technical target for 10yr yields was 2.47, and with today's lows at 2.474, it could be considered a "test" from a technical standpoint. For their part, MBS are another quarter point higher, at their best levels since June 19th.
That said, the price action could be a bit more compelling. As it stands, this rally extension feels more like the credits at the end of a movie. In this case, the credits are are just scrolling words on a screen. There are no hilarious outtakes, no allusions to sequels, and no thought-provoking adjustments or conclusions to the main storyline. It's just sort of "there."
Of course any move that brings rates to their lowest levels in more than 4 months can be as uneventful as it wants to be and we wouldn't complain. The observation merely serves to suggest that trading levels are about where we thought they'd be on a weak NFP, and we're now waiting for the next move--probably until tomorrow 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 11:09 AM EST
Morning Reprice Alerts and Updates
Below is a recap of instant Reprice Alerts
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Bond Markets Holding Modest Overnight Gains; Stock Lever in Play
Equities and Treasury yields moved lower in tandem overnight, with the latter seeing more volatility within its narrow range. 10yr yields moved down to 2.488 just after midnight and bounced back to 2.508 at the start of the European session.
Those high yields from the overnight session have ended up being a supportive ceiling that has now lasted through the early domestic trading. Volume has been "OK," but not epic. Treasuries moved off their best levels into domestic hours, but still hit 8am in positive territory. MBS consequently opened up a few ticks higher than yesterday and have extended the gains while Treasuries held the aforementioned overnight ceiling.
930-1030am has seen more connectivity between stocks and bonds, where weakness in equities is currently helping bond markets maintain some positivity. Fannie 3.5s are currently up 6 ticks at 102-24 while 10yr yields are down just under 2bps at 2.4944.
None of the morning's data has had an impact, which was to be expected. Instead, today is a day for watching technical levels to assess the underlying mood and conviction of yesterday's rally. The pivot-point ceiling bounce overnight (10's treating yesterday's floor as today's ceiling) is promising so far. Technical significance increases greatly as we approach 2.47, if we approach 2.47.
Live Chat Featured Comments
Victor Burek : "I am doing a loan right now for a mom and son. was told 2 apps"
Gus Floropoulos : "don't think there is an issue with more than 2 1003, I had 4 on one once-conventional"
Jeff Anderson : "Not 100% on that for you. We put the son and mom on the same app."
Matt Hodges : "i thought you could only do 2 1003s"
Matt Hodges : "odd question - Son and mother buying house - O/O and using sister as Non-occ CB - meaning 3 1003s... can that be done?"
Ted Rood : "They supposedly put out 150,000 ads per month, targeted to specific groups such as renters with good credit. Little above my pay grade and expertise level."
Joshua Crater : "Ted do it yourself, not hard at all just takes a little practice"
Ted Rood : "Anyone here using a third party to do targeted FB ads? If so, love to pick your brain when convenient. 314-740-0004. Thanks Ted"
Andrew Benson : "hm. 105-17 was my target on the 4.0. but I love your optimism guys!"
Michael Owens : "under 4% this week or next"
Dan Clifton : "gm all. 10 year under 2.50. good start.i will be happy to just hold around these levels"
Christopher Stevens : "love waking up to sub 2.50"
Oliver Orlicki : "2.49"