MBS Commentary

MBS CLOSE: Ticked Up A Bit After Hours

Matthew Graham — Thu, 02 Jul 2009 21:16:00 GMT

closing post for NFP thursday before the 4th of july weekend. 5.0's ticked up a bid after the book close, 4.5's ticked down. the 10yr went sideways a mere 3/1000's off 3.5 even. Likewise, 4.5's and 5.0's are both within a tick of 100-00 on 102-00 respectively. Talk about technical gravity! ...(read more)

MBS AFTERNOON: AFTER HOURS ALERT (KINDA)

Adam Quinones — Thu, 02 Jul 2009 19:06:00 GMT

After reaching an intraday high of 102-06, the FN 5.0 has moved back to its long standing resistance 102-00 price level. Meanwhile, the other "rate sheet influential" MBS coupon, the FN 4.5, which we are still not willing to award the current coupon title belt...is feeling the gravitational forces of "parnertia" pulling on prices....(read more)

MBS LUNCH: Not Much To Report...

Matthew Graham — Thu, 02 Jul 2009 17:22:00 GMT

On Thursday July 2nd, following the release of weaker than expected NFP, MBS continue to rally in a relatively stable pattern. Tsy's are following a similar pattern but are certainly outperforming, thus causing massive spread widening. This could be a good sign for next week, but a potential short covering rally in stocks is a risk suggested by technical levels in s and p ...(read more)

MBS MORNING: Big Picture Unknowns Still Limiting MBS Gains

Adam Quinones — Thu, 02 Jul 2009 14:16:00 GMT

The MBS trading environment remains defensive. Market participants still broadly prefer to avoid extension risk heavy "down in coupon" strategies as there are far better, shorter lived "up in coupon" positions that can be taken (minimal prepay risk in the mortgage market right now)...leaving the Federal Reserve alone to fight off originators and servicer selling. This is a function of high volatility in the trading environment, or more simply, the fact that the BIG PICTURE is still very unclear which is forcing investors to stay away from current coupon MBS. ...(read more)

MBS OPEN: NFP IN! -467k. Previous Revised Down as Well!.

Matthew Graham — Thu, 02 Jul 2009 12:28:00 GMT

MBS OPEN: NFP IN! -467k. Previous Revised Down as Well!. MBS and tsy's react by initially improving. 10 yr heading to 3.5./ MBS up 4-5 ticks. Jobless claims also out worse than expected..................................................................(read more)

MBS CLOSE: What Dreams May Come?

Matthew Graham — Wed, 01 Jul 2009 21:28:00 GMT

Preparing for NFP on 7/1/09 The market has been in a relatively sidways pattern since the much anticipated FOMC statement which helped continue to calm a market panicked over duration. Tomorrow's NFP is "the next big thing." In this post we reiterate our previous stance of remaining extremely defensive in the face of such potentially market-moving data. Anything Can Happen!...(read more)

MBS AFTERNOON: Range Widens (For The Better...)

Matthew Graham — Wed, 01 Jul 2009 19:19:00 GMT

After a relatively sidways early afternoon, MBS and tsy's are improved, both at their best levels of the day. Again, almost all of the directionality today can be chalked up to a dress rehearsal before tomorrow's NFP and inception of a 3 day weekend...(read more)

MBS LUNCH: Encountering All Manner Of Resistance

Matthew Graham — Wed, 01 Jul 2009 17:14:00 GMT

Resistance abounds.... Yesterday and today, the 5.0 encountered a floor around 101-17 to 101-18 Thus far, 5.0's unable to crack a ceiling at 101-24 (1 tick up on the day at least!) 10UST wasn't willing to crack 3.6, despite numerous tries, but...(read more)

MBS MORNING: Seeking Guidance. Defensive While Waiting

Adam Quinones — Wed, 01 Jul 2009 14:54:00 GMT

The rates market is defensive as most markets are essentially trendless...randomly testing resistance and support levels...in search of NEW DIRECTION!!! The S&P has moved above 928 this morning....look for this price point to prove hard to break....(read more)

MBS OPEN: New Quarter Begins, ADP Worse Than Expected

Matthew Graham — Wed, 01 Jul 2009 12:16:00 GMT

Yesterday's Recap - Way down, then way up, then way down again ("way" as in just over 10 ticks, not as in a major sell-off) - Stocks lost as well - Investor confidence higher, consumer confidence lower - Case Shiller out with "least...(read more)

MBS CLOSE: Illustrating the Evolution of the Marketplace in Q2

Adam Quinones — Tue, 30 Jun 2009 21:35:00 GMT

Quarter 2 has come to an end.... Here are some charts to illustrate the evolution of the marketplace in 2Q 2009: LIBOR CURVE AND LAST BUT NOT LEAST.... I think I adequately laid out "WHAT NOW" in MBS AFTERNOON The Economic Calendar Tomorrow...(read more)

MBS AFTERNOON: Skittish Start to Q3

Adam Quinones — Tue, 30 Jun 2009 19:32:00 GMT

Hmmm...Treasury traders appear a bit skittish. Why? Look! Stocks ticked up off their lows and 10 yr traders panicked a bit.... The entire marketplace is in search of direction. Stocks have been range bound, essentially trendless capped by resistance,...(read more)

MBS LUNCH: Quarter Ends at 3pm for MBS

Adam Quinones — Tue, 30 Jun 2009 17:29:00 GMT

Lets check out how ranges are holding up... In stocks, strong resistance at 910 (62% retrace) is keeping losses in check for the S&P. So it looks like stocks are range bound right? If you cant answer this...look at the above and below charts. See...(read more)

MBS MORNING: Taking Leadership from Stock Lever

Adam Quinones — Tue, 30 Jun 2009 15:06:00 GMT

Remember that statement we made last week about economic data being in focus this week? IT IS! After a "less weaker than expected" (yeh its like that) S&P headline on home prices ( READ STORY ), stocks moved higher and the yield curve steepened...(read more)

MBS ALERT: Lost 11 Ticks to Data Print

Adam Quinones — Tue, 30 Jun 2009 13:13:00 GMT

"Less weak" than expected data print + JV trading desk (light trading in the MBS market) = Dear Range, Moderate! Yours Truly, Rate Sheets...(read more)