10yr yields had been careful to avoid dipping below yesterday's latest levels until after all of this morning's data was out of the way. Once it was, a glut of buying came through in spite of the as-expected ISM data. This can be explained in part simply by the balance of the morning's data being slightly weaker, but the pace of the rally suggests 'tradeflow considerations' adding to the positivity behind the scenes.
(what are tradeflow considerations?)
After moving below 2.646, 10yr yields found their next technical ledge at 2.62 and bounced excessively until 11:42. The resulting break led to another flush of momentum with traders who had been betting on a move higher in rates being forced to buy and cover their losses.
10's are now down to 2.61, but made it as low as 2.603--effectively the bottom end of the 3-month range. MBS are underperforming today, but still following Treasuries. Fannie 4.0s are up 7 ticks at 104-31. Several lenders have already repriced positively and the possibility remains at current levels.
MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing
is available via MBS Live.
| MBS || |
97-24 : +0-09
101-25 : +0-07
104-31 : +0-06
| Treasuries || |
0.4104 : -0.0076
2.6115 : -0.0365
3.4197 : -0.0383
| Pricing as of 5/1/14 12:02PMEST |
Morning Reprice Alerts and Updates
10:13AM : Bond Markets Improve After ISM and Construction Spending Data
9:00AM : Slightly Weaker Overnight, Holding Ground After Mixed Data
Live Chat Featured Comments
Matthew Graham : "RTRS- US JOBLESS CLAIMS ROSE TO 344,000 APRIL 26 WEEK (CONSENSUS 319,000) FROM 330,000 PRIOR WEEK (PREVIOUS 329,000)"
Matthew Graham : "RTRS - US MARCH PERSONAL INCOME +0.5 PCT (CONS +0.4 PCT) VS FEB +0.4 PCT (PREV +0.3 PCT)"
Matthew Graham : "RTRS- US MARCH REAL CONSUMER SPENDING +0.7 PCT, BIGGEST RISE SINCE AUG 2009, VS FEB +0.4 PCT (PREV +0.2 PCT)"
Matthew Graham : "RTRS - ISM REPORT ON U.S. MANUFACTURING SHOWS PMI AT 54.9 IN APRIL (CONSENSUS 54.3) VS 53.7 IN MARCH"
Victor Burek : "so ISM is pretty good, and we improve"
Michael Gillani : "Another rally......"
Brent Borcherding : "I'm not sure this is setting up well for us tomorrow."
Victor Burek : "would rather rally going into it then selling"
Michael Gillani : "If NFP is a big beat and we get killed, that would put us right back in the 2.7-2.75 range we've been in for awhile if we can hold 2.6-2.65 today in my opinion."
Matt Hodges : "imo, more likely red tomorrow than green"
Matt Hodges : "i'm advising 35 day and under to lock"
Michael Gillani : "I would definitely lock em up today too! If we see a miss and rally on, sell new loans and build the pipe back up with the rally but don't be greedy today! At least I'm not."
Mark Gordon : "We are basically within 0.5% SRP of 10 month lows on rates...I think it's a very good time to lock."