As of the 3pm Treasury pit close (the unofficial end of the day for bond markets), little, if anything has changed from this morning. Despite having a wide variety of potential market movers in play, bond markets instead saw a session that would be hard pressed to be more uneventful.
Treasuries were slightly weaker in the overnight session with yields pushed higher by a generally improving risk tone. This may have had something to do with stronger Chinese GDP, but even without it, there was still some 'unwinding' to do from yesterday's Ukraine- inspired flight-to-safety. When we see such flights, bond markets are preemptively moving into stronger territory on the chance that geopolitical tensions continue escalating rapidly. If geopolitical tensions to anything else, bonds lose some of those gains.
That general theme made for weaker opening levels in MBS, though just as they underperform Treasuries into the risk rally, they outperform into the unwinding of that rally. In other words, MBS weren't as weak as Treasuries at the open, when compared to yesterday's latest levels.
Weaker Housing Starts data helped bond markets hold their ground against further losses and from there on out, bonds held on to the weakest levels as a supportive barrier. For what it's worth, those supportive levels were starkly in line with yesterday's weakest levels.
When bond markets continue to trade INSIDE yesterday's range (aka an "inside day"), it tacitly confirms one of two things. Either there's a tremendously well-balanced battle between bulls and bears, or the day is simply uneventful. Given the lack of concerted effort to push in either direction combined with the tepid economic data and tomorrow's early closure before an extended holiday weekend, we'll go with the latter (i.e. "simply uneventful").
MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing
is available via MBS Live.
| MBS || |
97-05 : -0-02
101-07 : -0-03
104-14 : -0-02
| Treasuries || |
0.3750 : +0.0040
2.6373 : +0.0093
3.4536 : -0.0064
| Pricing as of 4/16/14 3:17PMEST |
Today's Reprice Alerts and Updates
2:34PM : MBS and Treasuries Holding Narrow Ranges at Best Levels
9:24AM : Stronger Manufacturing Data Gives Bond Markets Pause
8:48AM : Holding Ground in Weaker Territory After Lackluster Housing Data
MBS Live Chat Highlights
Andrew Haynes : "So is this where be bounce off of 2.6 and head higher to 2.8 going into NFP next month?"
Victor Burek : "I am hoping this is where we bounce off of 2.66 and move back to lower end of range of 2.60"
Matthew Graham : "feels like a soap opera cliff-hanger. "Find out next week!""
Matt Hodges : "any advice DU or LP - 95% with monthly MI, good reserves, low DTI, 753 and 784 middles, BUT last active account reported 10/13 - all ZEROs"
Benjamin Biscoe : "my vote is LP if the scores are higher"
Joseph Daquino : "I like LP since they have reserves."
Benjamin Biscoe : "mgic will also take findings subject to 3 overlays"
Hugh W. Page : "I just breezed thru Yellen's speech......Gives you some insight I think."
Hugh W. Page : "My takeaway is Yellen is quite confident that QE definitely helped employment. Yet, she also thinks significant "slack" exists and full employment is still a couple of years down the road. My guess is she would be be gung ho ready to turn the QE tap back on if she felt progress stalled on the growth/employment front. "