MBS Live: MBS MID-DAY
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FNMA 3.5
101-28 : +0-04
FNMA 4.0
104-08 : +0-02
FNMA 4.5
105-31 : +0-02
FNMA 5.0
107-26 : +0-03
GNMA 3.5
103-09 : +0-04
GNMA 4.0
106-22 : +0-03
GNMA 4.5
108-18 : +0-02
GNMA 5.0
110-12 : +0-04
FHLMC 3.5
101-20 : +0-03
FHLMC 4.0
103-31 : +0-02
FHLMC 4.5
105-23 : +0-03
FHLMC 5.0
107-17 : +0-03
Pricing as of 11:01 AM EST
Morning Market Updates
A recap of MBS Market Updates provided by MND Analysts and streamed live to the MBS Live Dashboard.
9:46AM  :  ALERT: Bond Markets Weaker Into Stock Market Open, Holding Ground
As we've seen several times in recent sessions, bond markets turned weaker shortly after 9am. The stock-lever has been doing a better job of staying connected in March, particularly during the bigger moves.

Treasuries are somewhat tentative at the moment as stocks are opening in negative territory but have not yet fallen past overnight lows in S&P futures. 10yr yields have a supportive pivot so far this morning at 2.365. The analogous version for MBS is at 101-26 in Fannie 3.5's. Our first goal is to hold one or both of those, and if successful, assess upside potential from there.

The only other notable calendar item this morning is scheduled Fed Twist buying in the long end from1015am-1100am. Bernanke himself speaks at 1245pm.

The markets' strings remain at the mercy of the "unseen hand" as tradeflows convincingly trump fundamentals. That leaves us resigned to watch and react as opposed to trying to "get ahead of the market." Attempts to do otherwise are risky at best, if not outright foolish.

Fannie 3.5's are currently up 9 ticks at 102-01 and 10yr yields are down 3 .6bps on the day at 2.34. S&P futures are pushing lower at the moment, down 12 points from 5pm, helping bond markets bounce back from their pre-stock-market-open concessionary selling.
8:39AM  :  ECON: Housing Starts Tepid on Single-Fam, Permits Rise
* Starts -1.1 pct vs Jan +3.7 pct
* Annual rate of 698k vs consensus 700k
*permits +5.1 pct vs +1.6 pct Jan
* permits 717k annual rate vs 690k consensus
* single family starts -9.9 pct, multi-fam +21.1 pct
* permits highest since 10/2008
* Note wide margins of error in some of the statistics below

The U.S. Census Bureau and the Department of Housing and Urban Development jointly announced the following new residential construction statistics for February 2012:

Building permits in February were at a seasonally adjusted annual rate of 717,000. This is 5.1 percent (±1.2%) above the revised January rate of 682,000 and is 34.3 percent (±3.1%) above the February 2011 estimate of 534,000. Single-family authorizations in February were at a rate of 472,000; this is 4.9 percent (±1.2%) above the revised January figure of 450,000. Authorizations of units in buildings with five units or more were at a rate of 219,000 in February.

Housing starts in February were at a seasonally adjusted annual rate of 698,000. This is 1.1 percent (±15.9%)* below the revised January estimate of 706,000, but is 34.7 percent (±16.7%) above the February 2011 rate of 518,000. Single-family housing starts in February were at a rate of 457,000; this is 9.9 percent (±11.4%)* below the revised January figure of 507,000. The February rate for units in buildings with five units or more was 233,000.

Housing completions in February were at a seasonally adjusted annual rate of 568,000. This is 6.2 percent (±15.8%)* above the revised January estimate of 535,000, but is 7.0 percent (±14.1%)* below the February 2011 rate of 611,000. Single-family housing completions in February were at a rate of 421,000; this is 8.2 percent (±18.9%)* above the revised January rate of 389,000. The February rate for units in buildings with five units or more was 144,000.
Featured Market Discussion
A recap of the featured comments from the Live Discussion on the MBS Live Dashboard.
Michael Gannon  :  "30bps"
Andrew Horowitz  :  "rates question for toseof you wlling to share, from you last negative reprice to todays current prices how much better were you?"
Michael Gannon  :  "3.875 is still best execution FHA but barely"
Brayden Alexander  :  "no, my point was increased payment can put the second in a risker position, although the equity decreases faster."
Steven Stone  :  "they want to pay the loan off"
Steven Stone  :  "term shortening borrowers are least likely to default"
Brayden Alexander  :  "I only asked becasue that is a reason that mandatory subordinations would never fly."
Brayden Alexander  :  "yes"
Tony Cardinal  :  "you mean 30 to 15?"
Jodi White  :  "A HARP can increase a borrowers payment, but no more than 20%"
John Paul Mulchay  :  "Yes"
Brayden Alexander  :  "Can a HARP refi ever increase a borrowers payment?"
Ira Selwin  :  "about 18 bps better from their last rate change from yesterday Mike"
Mike Drews  :  "how bad"
Ira Selwin  :  "WF out early this am"
Joe Ridings  :  "will cost borrower another 250 or i may have to cover it this time"
Dan Clifton  :  "Joe why not? you cant close the loan otherwise"
Joe Ridings  :  "i had a DURP 1.0 125 cltv loan fully approved but PHH wont subordinate. now i just re did loan and ran findings and with harp 2.0 i get a PIW at a higher value. puts my cltv at 95% instead of 125%. dare i send it back to PHH and request subordination again? "
Dan Clifton  :  "HARP 2.0 question, anyone know the date when 15 year terms will be allowed to go over 105%, cant remember i think it is June 2012"
Andrew Russell  :  "I then wholeheartedly will afix my rally cap to my bald head"
Matthew Graham  :  "some measure of continuation, even if losing steam"
Andrew Russell  :  "So sell off today indicates broader trend"
Matthew Graham  :  "A close under 2.36 in 10's today would go a long way toward establishing that support in terms of levels, and in terms of MBS, it would likely leave yesterday and Friday as back to back lows in the high 101's. we don't often see two such days followed by an "up" day if a broader sell-off is to wholeheartedly continue"
Andrew Russell  :  "Ok. I vote for option A. The whole "good day" theory. "
Matthew Graham  :  "While this certainly isn't to say we're not able to have a decent day, I would note that most of the volume seen over the past 3 sessions was to confirm a break out of the previous range with a noticeably lighter amount of volume stepping in to support falling bond prices"
Andrew Russell  :  "Another 16 tic drop would sour my day"
Andrew Russell  :  "Yes sir"
Matthew Graham  :  "dam, as in recent lows?"
Andrew Russell  :  "MG. Does the dam have strong foundation or is it about to break again?"
Matthew Graham  :  "margins of error "only" about 15% for Starts... "
Andrew Horowitz  :  "renters"
Steven Stone  :  "devil is in the details"
Steven Stone  :  "yeah"
Andrew Horowitz  :  "single family declined though, multi family permits up "
Andrew Horowitz  :  "weather"
Matthew Graham  :  "Permits WAY up though. +5.1% vs +1.6% rise in January, highest since October 2008"
Matthew Graham  :  "RTRS - US FEB HOUSING STARTS 698,000 UNIT RATE (CONSENSUS 700,000) VS JAN 706,000 (PREV 699,000) "
Matthew Graham  :  "RTRS - US FEB HOUSING STARTS -1.1 PCT VS JAN +3.7 PCT (PREV +1.5 PCT) "