The beginning of the overnight session was uneventful, with relatively little movement until European markets came online. From there, bond markets weakened, resulting in slightly higher yields and lower prices to start the domestic session.
There was no scheduled data earlier in the morning, but the 10am reading of ISM's Non-Manufacturing index was stronger than expected. In fact, it was the highest since 2005 (but had been fairly close to that distinction already). Factory Orders data was also stronger, but carries less weight than ISM.
Bond markets slid further after the data and equities markets rebounded modestly. Prices moved low enough that some lenders are facing over an eighth of a point drop since initial rate sheets. This leaves the door open for moderate negative reprice risk. That said, we haven't seen any yet, and no new lows have been made since 10:40am.
MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing
is available via MBS Live.
| MBS || |
98-09 : -0-08
102-05 : -0-07
105-14 : -0-04
| Treasuries || |
0.4800 : +0.0080
2.5180 : +0.0270
3.3240 : +0.0290
| Pricing as of 8/5/14 11:36AMEST |
Morning Reprice Alerts and Updates
10:22AM : ALERT ISSUED: Post-Data Weakness Continues; Now Entering Reprice Risk Territory
10:12AM : Bond Markets hit Weakest Levels After Stronger Data
9:05AM : Bond Markets Slightly Weaker Overnight and Into US Session
Live Chat Featured Comments
Matthew Graham : "that's really the answer though. Because in much of the rest of the world treats Markit as the definitive PMI reading (that said, they don't have the equivalent of ISM)."
Frank Hanna : "become of implied value, but often time you get the same thing at a better value."
Matthew Graham : "why don't people buy as much generic grocery store 'cola' as they do coke/pepsi?"
Scott Valins : "why doesn't MARKITs data get the same respect as ISM? Markit's data showed a miss"
Victor Burek : "probably thanks to stocks..down over .50%"
Charles Tadros : "at least we are putting up a fight"
Matthew Graham : "Also... RTRS- U.S. JUNE FACTORY ORDERS +1.1 PCT (CONSENSUS +0.6 PCT) VS MAY -0.6 PCT (PREV -0.5 PCT)"
Matthew Graham : "RTRS- ISM NON-MANUFACTURING BUSINESS ACTIVITY INDEX 62.4 IN JULY (CONSENSUS 58.1) VS 57.5 IN JUNE"
Matthew Graham : "RTRS - ISM REPORT ON U.S. NON-MANUFACTURING SECTOR SHOWS PMI AT 58.7 IN JULY (CONSENSUS 56.3) VS 56.0 IN JUNE"