Bond markets trudged farther into positive territory today, this time crossing into the best levels since December's FOMC Announcement for MBS and since Christmas Eve for 10yr Treasuries. As far as MBS are concerned--and as one of today's updates noted--to consider MBS at their best levels since FOMC is a bit misleading as we're about to "roll" (meaning that January coupons are about to be retired and when we move to February coupons as the representative for "MBS Prices," we'll drop about 10/32nds). So "best in two weeks" is probably a more accurate assessment.
As expected, tradeflow considerations overpowered the economic data today. This fact was made all the more apparent by a rather meaningful 'beat' in the Trade Deficit (it was much narrower than expected) followed by a complete lack of reaction in bond markets. Instead, the improvements have gradually trickled into markets in equal proportion to trader participation.
This phenomenon stands its biggest chance of breaking down tomorrow morning as the data is important enough to be the primary motivation for rate movements. The focal point is the 8:15am ADP Employment Report in the morning and the FOMC Minutes in the afternoon (keep in mind that the "Minutes" release is simply a more detailed account of what went on at the December 18th meeting that produced the tapering announcement).
MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing
is available via MBS Live.
| MBS || |
95-14 : +0-06
99-29 : +0-07
103-16 : +0-09
| Treasuries || |
0.3969 : +-0.0001
2.9410 : -0.0200
3.8840 : -0.0130
| Pricing as of 1/7/14 4:37PMEST |
Today's Reprice Alerts and Updates
12:13PM : Positive Reprice Potential as MBS Hit Higher Highs
8:58AM : Trade Gap a Non-Event; Bond Markets Stay Close to Unchanged
MBS Live Chat Highlights
Sung Kim : "on another note, i am reading through Encompass' QM/ATR release and some of these slides require a PhD to decipher"
Matt Hodges : "sung - i re-read the entire report and am watching Calyx's hour long seminar....tedious"
Sung Kim : "putting a loan together is not the problem, it's the 3rd parties that can delay things"
Matthew Graham : "RTRS- U.S. SELLS $30 BLN 3-YEAR NOTES AT HIGH YIELD 0.799 PCT, AWARDS 4.18 PCT OF BIDS AT HIGH "
Matthew Graham : "RTRS- FED'S WILLIAMS: EXCESSIVELY HIGH UNEMPLOYMENT, EXCESSIVELY LOW INFLATION CALLS FOR CONTINUED MONETARY ACCOMMODATION "
|Time ||Event ||Period ||Actual ||Forecast ||Prior |
|Wednesday, Jan 08 |
|8:15 || ADP National Employment (k)* || Dec || || 200 || 215 |