As stock traders prepare to head home, with hat in hand and tail firmly stuck between legs, both benchmark Treasuries and "rate sheet influential" MBS coupons are trading near their most aggressive levels of the day.
The MBS NINJA just sent me his comments on the day:
Another day has passed by with MBS largely on the sidelines, as the actions around the globe (both in bonds and stocks) largely failed to include mortgage-backed securities. As treasuries got a huge “flight to quality” boost from the doings and undoings in the Mediterranean Sea (and countries bordering said body of water), MBS was much more pedestrian while the market sits and anxiously waits prepays in another hour or so.
Not much can be gained on this market as yield spread are as tight as they have been in recent memory; all while the Federal Reserve threatens to make good on its promise to recede from the MBS market ($12 billion again this past week). With Supply still hovering in the mid $1 billion range, the $12 billion per week translates into a daily average twice as strong on the bidside as supply-spreads tighten. It also signals that the Fed (by virtue of large blocks of 4.5%s purchased) thinks the market needs its hand held still. This translates into those down days in prices, MBS yields rise less, while on higher priced days like today, MBS wont fall as much in yield as do treasuries.
The 3.375% coupon bearing 10 year Treasury note is trading +0-29 at 98-06 yielding 3.564%.
The FN 4.0 is +0-18 at 98-12 yielding 4.157%. The FN 4.5 is +0-16 at 101-10 yielding 4.368%. The secondary market current coupon is 4.326%.
A few readers called attention to this earlier today and yesterday afternoon. Check out what White House Press Secretary Robert Gibbs had to say about looming revisions to previous jobs data:
"There will be a jobs revision I'm told tomorrow that's likely to show additional job loss at the first part of the recession that started in December 2007, making the whole of job loss that we've dealt with even deeper"
Bloomberg published some cool charts on the topic. View them all HERE
Check out this one....
What do you think about NFP tomorrow?
If youre gonna get any more reprices for the better...they will come in the next 60 minutes.
MBS Market Alerts
