MBS MID-DAY: Volatility and Moderate Weakness, but Finally Improving After Yellen
Bond markets began the week on something of a volatile note. Treasuries had weakened slightly in the overnight session and MBS walked in the door about an eighth of a point lower than Friday's latest levels (in terms of Fannie 4.0s). They're currently back at those same levels, but there's been several back-and-forth swings in the meantime.
The first move down saw a gradual loss of another 4/32nds, bringing bond markets to their worst levels of the day just after 9am. A much weaker than expected reading on the Chicago PMI data failed to have the anticipated result (i.e. there was no noticeably positive bounce for bond markets despite the weaker data).
Moments later, however, Fed Chair Yellen was out with some ostensibly reassuring comments on the Fed's current approach to accommodation, chiefly that "extraordinary commitment to stimulus will be needed for some time--a view widely shared by fellow policymakers." Bond markets saw a VERY brief bounce toward the best levels of the day, but nearly as quickly, were right back to the weakest levels.
There aren't any great explanations for the pervasive negativity this morning, other than the pervasive positivity last week perhaps seeing some measure of correction. There were several headlines regarding a reduction of Russian troops at the Ukrainian border, but none of them seemed to line up well with market movements. Ultimately, bonds look like they're finding a bit of traction now as they've moved more calmly to their stronger levels yet again (though these are still in negative territory compared to Friday's close).
MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing
is available via MBS Live.
| MBS || |
96-12 : -0-04
100-16 : -0-04
103-28 : -0-04
| Treasuries || |
0.4301 : -0.0199
2.7335 : +0.0215
3.5642 : +0.0202
| Pricing as of 3/31/14 11:45AMEST |
Morning Reprice Alerts and Updates
11:02AM : Range-Bound Overall, but Back Toward Best Levels Now
10:26AM : ALERT ISSUED: Fighting Back against Weakest Levels Frustrating Day to be a Bond
9:58AM : Limited Support From Weaker Chicago PMI Data; More Support From Yellen
9:01AM : Bond Markets Weaker Overnight; No Reprieve Into Domestic Session
Live Chat Featured Comments
Victor Burek : "if weather truly had as much impact as the media has said, Friday's number should be well over 200k"
Matthew Graham : "Tough to say for sure, but Chi PMI looks like a miss based on early reaction"
Matthew Graham : "RTRS- CHICAGO PURCHASING MANAGEMENT INDEX AT LOWEST SINCE AUGUST"
Victor Burek : "pretty big miss"
Matthew Graham : "RTRS - CHICAGO PURCHASING MANAGEMENT INDEX 55.9 IN MARCH (CONSENSUS 59.0) VS 59.8 IN FEBRUARY"
Matthew Graham : "RTRS- FED'S YELLEN: EXTRAORDINARY COMMITMENT TO STIMULUS WILL BE NEEDED FOR SOME TIME, A VIEW WIDELY SHARED BY FELLOW POLICYMAKERS"
Andy Pada, Jr. : "extraordinary commitment!"
Matthew Graham : "RTRS- YELLEN: CUTS TO BOND BUYING NOT A LESSENING OF COMMITMENT, BUT REFLECTION OF SOME LABOR MARKET PROGRESS"
Victor Burek : "pretty bond friendly statements"
Victor Burek : "so, pretty bad data on a top tier report, bond friendly yellen, yet we are back to lows and stocks are on fire"