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FNMA 3.5
101-18 : -0-07
FNMA 4.0
104-14 : -0-06
FNMA 4.5
106-13 : -0-02
FNMA 5.0
108-12 : +0-01
GNMA 3.5
102-29 : +0-01
GNMA 4.0
106-03 : -0-05
GNMA 4.5
108-20 : -0-02
GNMA 5.0
110-17 : +0-01
101-14 : -0-01
104-09 : -0-05
106-07 : -0-02
108-05 : -0-01
Pricing as of 10:59 AM EST
Morning Market Updates
A recap of MBS Market Updates provided by MND Analysts and streamed live to the MBSonMND Dashboard .
9:53AM  :  ALERT: No One Puts Baby in the Corner, but Stocks are Trying
Who's our "Baby?" Bond markets, of course. Focusing on 10yr notes for a moment, yields walked in the door about mid range vs yesterday and went sideways. stock futures were even lower than yesterday's worst levels, but they regained a bit of a technical floor. Bond markets clearly reacted to that and are clearly "stalking" stocks (like a cat), ready to move in for the kill, but keeping distance when stocks show signs of putting up a fight. This morning's rally in stocks over the past hour has seen 10yr yields rise almost 10bps, and MBS were down to 104-03 in Fannie 4.0's--in other words, rising stocks are backing bonds into a corner where current weakness meets yesterday's low range. If bonds are "baby," it now looks the tight-jeaned dance instructor is here to put an end to recent trends. Stocks are bouncing lower and just dipped below the open. MBS are well off their recent lows. 10yr yield found a ceiling. Come on out and dance baby.
8:57AM  :  ALERT: MBS Lose Some Ground After, But Not Due to Econ Data
Fannie 4.0's are down 13 ticks to 104-06 and 3.5's are down 11 ticks to 101-13. At face value, the losses seem motivated by the 830am economic data, but that's not the case. Benchmark TSYs have been flat all morning after walking in the door just slightly weaker but have been in a 2bp range since 830am. That's your first clue that we're not seeing econ-data-driven selling in MBS. The second clue relates to the volatility metrics we discussed yesterday. In short, they're up a bit, which almost always coincides with MBS widening versus Treasuries. In our view, it's a good thing to see MBS down a bit this morning. The rapidity of recent gains has been creating serious problems for the industry. And if markets can put the brakes on prices without a significant move below 104-00 in 4.0's, that would be great. Who even knows what to expect from pricing this morning... Things were a mess yesterday with TONS of reprices for the worse even into the rally (see: "serious problems for the industry"). Hopefully a night of sleep and a day of experience in this "new era" will help things stay a bit more even-keeled today.
8:37AM  :  ECON: Jobless Claims Fall to Four Month Low
(Reuters) - New U.S. claims for unemployment benefits dropped to a four-month low last week, government data showed on Thursday, a rare dose of good news for an economy that has been battered by a credit rating downgrade and falling share prices. Initial claims for state unemployment benefits fell 7,000 to a seasonally adjusted 395,000, the Labor Department said, the lowest level since the week ended April 2. Economists polled by Reuters had forecast claims steady at 400,000. The prior week's figure was revised up to 402,000 from the previously reported 400,000. The Federal Reserve said on Tuesday economic growth was considerably weaker than expected and unemployment would fall only gradually. The U.S. central bank promised to keep interest rates near zero until at least mid-2013. Hiring accelerated in July after abruptly slowing in the past two months. However, there are worries that a sharp sell-off in stocks and a nasty fight between Democrats and Republicans over raising the government's debt ceiling could dampen employers' enthusiasm to hire new workers. The continued improvement in the labor market could help to allay fears of a new recession, which have been stoked by the economy's anemic growth pace in the first half of the year. A Labor Department official said there was nothing unusual in the state-level claims data, adding that only one state had been estimated. The four-week moving average of claims, considered a better measure of labor market trends, slipped 3,250 to 405,000. Economists say both initial claims and the four-week average need to drop close to 350,000 to signal a sustainable improvement in the labor market. The number of people still receiving benefits under regular state programs after an initial week of aid dropped 60,000 to 3.69 million in the week ended July 30. (Reporting by Lucia Mutikani; Editing by Neil Stempleman)
8:35AM  :  ECON: Trade Gap Swells in June as Demand Wanes
(Reuters) - The U.S. trade gap widened in June to its largest since October 2008, as both U.S. imports and exports declined in a sign of slowing global demand, a government report showed on Thursday. The June trade deficit leapt to $53.1 billion, surprising analysts who expected it to narrow to $48 billion from an upwardly revised estimate of $50.8 billion in May. Overall U.S. imports fell by close to 1 percent, despite a rise in value of crude oil imports to the highest since August 2008. Higher volume pushed the oil import bill higher, as the average price for imported oil fell to $106 per barrel after rising in each of the eight prior months. U.S. exports fell for a second consecutive month to $170.9 billion, as shipments to Canada, Mexico, Brazil, Central America, France, China and Japan all declined. (Reporting by Doug Palmer; Editing by Chizu Nomiyama)

Featured Market Discussion
A recap of the featured comments from the Live Discussion on the MBSonMND Dashboard .
Matthew Graham  :  "and on a different note.... although you can't see 8/09 on the chart today, 4.0's tested 104-00 incessantly that afternoon. In terms of the modal highs (most frequently seen peaks in price), there's definitely a general sense of "pivot" between those highs and this morning's lows. Looks like the current fight is to determine if that pivot holds as a supportive floor, indicating more "sideways" or if it breaks and we downtrend along the descending line of "lower lows" that you might see with y"
Eric McDonald  :  "Adding to FHA talk...I have a customer @ 5%. I can take them to 4.25% on a $300k loan, pay all closing costs and UFMIP out of YSP and they save $15."
Matthew Graham  :  "RTRS - MICHAEL CLOHERTY, HEAD OF U.S. RATES STRATEGY, RBC CAPITAL MARKETS, NEW YORK "No special factors, so we didn't see any of the noise from the widely discussed FAA shutdowns. "We still had this disconnect between the level of claims and growth of payrolls. No major change there so I don't think this is going to significantly change anyone's expectations for the economic outlook here, particularly given all of the extreme market moves. "The attention is on equities and Europe, no"
Matthew Graham  :  "RTRS - US JUNE TRADE DEFICIT LARGEST SINCE OCT 2008 ($59.5 BLN) "
Matthew Graham  :  "RTRS - US JUNE OIL IMPORT PRICE $106.00/BBL, FIRST DROP SINCE SINCE SEPT 2010, VS MAY $108.70/BBL, +46.4 PCT FROM JUNE'10 $72.39/BBL "
Matthew Graham  :  "RTRS- US JUNE EXPORTS -2.3 PCT VS MAY -0.5 PCT, IMPORTS -0.8 PCT VS MAY +2.9 PCT "
Matthew Graham  :  "RTRS - US JUNE TRADE DEFICIT $53.07 BLN (CONSENSUS $48.00 BLN) VS MAY DEFICIT $50.83 BLN (PREV $50.23 BLN) "
Matthew Graham  :  "RTRS- US CONTINUED CLAIMS FELL TO 3.688 MLN (CON. 3.720 MLN) JULY 30 WEEK FROM 3.748 MLN PRIOR WEEK (PREV 3.730 MLN) "
Matthew Graham  :  "RTRS- US JOBLESS CLAIMS 4-WK AVG FELL TO 405,000 AUG 6 WEEK FROM 408,250 PRIOR WEEK (PREVIOUS 407,750) "
Matthew Graham  :  "RTRS - US JOBLESS CLAIMS FELL TO 395,000 AUG 6 WEEK (CONSENSUS 400,000) FROM 402,000 PRIOR WEEK (PREVIOUS 400,000) "