While yields still aren't back to last week's highs, they've taken a few more steps in that direction. Today's damage was mostly done after the Philly Fed data. These were my thoughts on it in this morning's 'day ahead,':
The only problem is that whole "weather" thing... It allows market participants to generally disregard weak data, but to rejoice in strong data. This will be most important today with respect to the 10am PhillyFed Survey. Reason being: Jobless Claims is a weekly report and if anything, bad weather is expected to help it improve as fewer folks make the trek to file unemployment claims. Philly Fed is the only other significant report and certainly stands a chance to be heavily affected by the weather if the weather is having half the effect that's been relayed in previous reports (and in the news). Again, this is all downside risk for bond markets
No earth-shattering conclusions there, but a good recap of markets behaving logically. If any part of the report served as damning testimony for transient weather effects, it was the 6-month outlook, which gave respondents an opportunity to comment on how they view business conditions into the summer months. Whereas most other components of the report were significantly weaker, the 6-month outlook was significantly stronger.
As stocks and bond yields digested that reality, they began moving higher together. Again, it's not much of a loss, but it's counterintuitive--a fact that magnifies unpleasantness. On a positive note, no further ground has been lost since 10:30am, so we can now watch levels during that time as supportive trip-wires for the rest of the day.
MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing
is available via MBS Live.
| MBS || |
96-08 : -0-05
100-17 : -0-04
104-01 : -0-04
| Treasuries || |
0.3306 : +0.0116
2.7626 : +0.0286
3.7232 : +0.0162
| Pricing as of 2/20/14 12:13PMEST |
Morning Reprice Alerts and Updates
10:31AM : ALERT ISSUED: Philly Fed Much Weaker, but so are Bond Markets; Negative Reprice Potential
8:58AM : Bond Markets Unchanged to Marginally Weaker After First Round of Data
Live Chat Featured Comments
Matthew Graham : "RTRS- US JOBLESS CLAIMS FELLTO 336,000 FEB 15 WEEK (CONSENSUS 335,000) FROM 339,000 PRIOR WEEK (PREVIOUS 339,000)"
Matthew Graham : "RTRS- US CONTINUED CLAIMS ROSE TO 2.981 MLN (CONS. 2.970 MLN) FEB 8 WEEK FROM 2.944 MLN PRIOR WEEK (PREV 2.953 MLN)"
Matthew Graham : "RTRS - U.S. JAN CPI +0.1 PCT (+0.1445; CONSENSUS +0.1 PCT), EXFOOD/ENERGY +0.1 PCT (+0.1278; CONS +0.1 PCT)"
Andy Pada, Jr. : "Philly Index will disappoint"
Michael Gillani : "Once again, any bad data will be blamed on weather but good numbers prove a growing economy."
Matthew Graham : "RTRS- PHILADELPHIA FED BUSINESS CONDITIONS FEBRUARY -6.3 (CONSENSUS 8.0) VS JAN 9.4"
Matthew Graham : "time to test the ability to blame weather"
Matthew Graham : "RTRS- PHILADELPHIA FED SIX-MONTH BUSINESS CONDITIONS FEBRUARY 40.2 VS JAN 34.4"
Matthew Graham : "again... 6-mo outlook improved. one month snapshot sucked. The report itself is a comment on weather-related effects"
Hugh W. Page : "Folks, I’m as cynical as most and have been for quite awhile and frankly I’m a little worn from it. The fact is we live in a trifurcated economic world right now where the very rich are doing very well and the poor are struggling horribly. This fact will not change soon and may worsen. In the middle are most of us just trying to get from one day to the next, live a happy life, and hope for a better future. Our job as mortgage professionals is to help those who are able to (mostly in that middle group), to experience the joys of homeownership with a mortgage plan that makes a positive difference for them. I’m trying to focus on that now. Sorry had to get that off my chest."
Jeff Anderson : "Well said Hugh. All we can do. We're all living with the same market."
Robert Rippy : "I just received a client communication from my primary lender that says this: Per RESPA regulations, attorney’s fees charged to review or prepare loan documents for the lender are considered part of the charge for origination services; therefore, must be listed in Block 1 of the GFE under origination charge."
John Tassios : "They may be trying to build in all of the APR fees into 1 box, incl atty. But I don't see how that will match up with final HUD. The closing atty will want to put it in their title / atty section"