Although mortgage originators experienced added excitement following an early afternoon MBS ALERT...the secondary market for mortgages (MBS) was quite sluggish yesterday. If you are curious about why production coupons experienced a heightened amount of gravity (fell fast) in the 2pm hour...READ THIS EXPLANATION.
Yesterday the yield curve steepened. The yield spread between 2s and 10s increased 4 bps to 198bps. The 10yr Treasury note yield rose from 2.89 to 2.94. The 30 yr bond yield rose from 3.69 to 3.74. Overnight TSY yields fell a few bps but have since erased a portion of overnight gains. TSY yields however remain lower than US closing marks. MBS/TSY yield spreads are mixed depending on your benchmark of choice. (tighter to 5s wider to 10s).
FN30_______________________________
FN 4.0 -------->>>> +0-03 to 99-31 from 99-28
FN 4.5 -------->>>> +0-04 to 101-23 from 101-19
FN 5.0 -------->>>> +0-03 to 103-00 from 102-30
FN 5.5 -------->>>> +0-00 to 103-25 from 103-25
FN 6.0 -------->>>> +0-00 to 104-19 from 104-19
GN30________________________________
GN 4.0 -------->>>> +0-07 to 100-05 from 99-30
GN 4.5 -------->>>> +0-05 to 101-29 from 101-24
GN 5.0 -------->>>> +0-02 to 103-17 from 103-15
GN 5.5 -------->>>> +0-00 to 104-02 from 104-02
GN 6.0 -------->>>> +0-00 to 104-21 from 104-21
Production MBS short term downside support price level (red line) and upside resistance price level (blue)....
Ahead of the earnings season's "opening pitch" US stock futures indicate that domestic equities will open 1.50% to 1.75% lower. Looks like market participants are beginning to believe the month long optimism in stock markets was nothing more than a bear market rally.
In Asia the NIKKEI and HANG SENG moved lower overnight while the TOPIX moved marginally to the upside. Halfway through European trading sessions equities are trading to the downside.
EFFECTIVE FED FUNDS: +0.01 to 0.14 from 0.13
LIBOR FIXINGS
O/N LIBOR: -0.0062 to 0.2775 from 0.2837
1 MONTH: -0.0062 to 0.4694 from 0.4756
3 MONTH: -0.0075 to 1.1494 from 1.1569
6 MONTH: -0.0125 to 1.7031 from 1.7156
1 YEAR: -0.0137 to 1.9787 from 1.9925
Summary of North Carolina vs. Michigan State: North Carolina = MAN. Michigan State = BOY
MBS Market Alerts
