MBSonMND: MBS MID-DAY
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Pricing as of 11:02 AM EST |
Morning Market Updates
A recap of MBS Market Updates provided by MND Analysts and streamed live to the MBSonMND Dashboard
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10:53AM :
FNCL 4.5's Holding Support at 101-28 For Now
The more advanced risk of reprices for the worse would likely be seen if FNCL 4.5's fall under 101-28, which marks MBS only real support bounce so far this morning. Treasuries seem to have an eye on stocks so far this morning and have managed to catch a supportive bid after S&P's turned away from 1300. 10yr yields are right at 3.44 currently and FNCL 4.5's at 101-29. Reprice targets for MBS would first be seen at 101-27 and grow increasingly important the lower past that level. Reprices for the better, in order to be widespread, need FNCL 4.5's into the 102's for more than just a brief foray.
10:34AM :
ALERT:
Treasuries Fail To Hold Support At 3.44. MBS Down
As the S&P ticks into the 1300's, 10yr notes refused to hold support at 3.44, but are not yet definitively on their way up to the weakest levels of the morning. Still, MBS have come down a few ticks with the FNCL 4.5 at 101-29. Lenders who priced early may consider reprices for the worse the longer that 4.5's stay in the high 101-20's.
10:05AM :
ISM Revisions
***ISM U.S. MANUFACTURING INDEX FOR DECEMBER REVISED TO 58.5 FROM 57.0 PREVIOUSLY ***NEW ORDERS INDEX FOR DECEMBER REVISED TO 62.0 FROM 60.9 PREVIOUSLY *** MANUFACTURING EMPLOYMENT INDEX FOR DECEMBER REVISED TO 58.9 FROM 55.7 PREVIOUSLY *** NON-MANUFACTURING INDEX FOR DECEMBER UNREVISED AT 57.1 *** NON-MANUFACTURING BUSINESS ACTIVITY INDEX REVISED TO 62.9 IN DEC FROM 63.5 PREVIOUSLY *** NON-MANUFACTURING NEW ORDERS INDEX REVISED TO 61.4 IN DEC FROM 63.0 PREVIOUSLY *** NON-MANUFACTURING EMPLOYMENT INDEX REVISED TO 52.6 IN DEC FROM 50.5 PREVIOUSLY
10:01AM :
December Pending Home Sales Rise 2.0%
U.S. DEC PENDING HOME SALES INDEX +2.0 PCT (CONSENSUS +1.0 PCT) TO 93.7 **** U.S. DEC PENDING HOME SALES -4.2 PCT FROM DEC 2009
9:52AM :
Pending Home Sales On Deck At 10am, While 10's Shy Away From 3.41+ Resistance
In just over 10 minutes, we'll get one of the last two pieces of econ data this morning in the form of December Pending Home Sales. It's seen at +1% annualized rate, down from +3.5% last month. Forecasts ranged from -3.2% to +4.0%. Meanwhile, after several bounces into 3.42% pivot, 10yr yields are on the march higher. They have technical levels in the mid 3.44's, then 3.46 and 3.48. So far, 3.44+ (drawn from post 830am high yield marks, is holding up, but too soon to say if that will continue to be the case. FNCL 4.5's have shed a few ticks, and now sit at 101-30.
9:17AM :
MBS Turn Positive In Post-Data Rally
After retracing to around 3.44, 10yr notes are back down to test resistance in the mid 3.41's (call it 3.42 basically). After FOMC yesterday, that level got set up as resistance and we haven't broken lower since. It also has some recent history as a pivot point. FNCL 4.5's are up 3 ticks on the day now about a half a tick under 102-00. This brings MBS roughly in line with the midpoint of yesterday's range. 10yr tsy's need to get below 3.42 though, if the MBS rally stands a decent chance to continue.
8:36AM :
Bonds Rally Following Econ Data
After trading near 3.46 earlier this morning, the 10yr yield has rapidly fallen following weaker than expected econ data. Jobless Claims rose to 454k versus a consensus of 405k and a previous reading of 403k. In addition, Durable Goods orders were down 2.5% versus a forecast for +1.5%. In the initial downtick, 10yr yields met resistance before crossing 3.42 and have since retraced into the 3.43's
8:33AM :
DATA FLASH: Durable Goods
***DEC DURABLES EX-TRANSPORTATION +0.5 PCT (CONS +0.8 PCT) *** U.S. DEC DURABLES EX-TRANSPORTATION +0.5 PCT (CONS +0.8 PCT) *** U.S. DEC DURABLES EX-DEFENSE -2.5 PCT (CONS +0.6 PCT) *** US DEC NONDEFENSE CAP ORDERS EX-AIRCRAFT +1.4 PCT (CONS +1.5 PCT)
8:31AM :
Jobless Claims Rise To 454k
***(CONSENSUS 405,000) FROM 403,000 PRIOR WEEK (PREVIOUS 404,000) ***US JOBLESS CLAIMS 4-WK AVG RISE TO 428,750 JAN 22 WEEK FROM 413,000 PRIOR WEEK (PREVIOUS 411,800) *** US CONTINUED CLAIMS RISE TO 3.991 MLN (CON. 3.85 MLN) JAN 15 WEEK FROM 3.897 MLN PRIOR WEEK (PREVIOUS 3.86 MLN) *** US INSURED UNEMPLOYMENT RATE RISES TO 3.2 PCT JAN 15 WEEK FROM 3.1 PCT PRIOR WEEK (PREV 3.1 PCT)
8:31AM :
S&P cuts Japan sovereign debt rating
(Reuters) - Standard & Poor's cut Japan's credit rating on Thursday for the first time since 2002, saying Tokyo lacked a plan to deal with its mounting debt, in a warning that will rattle other heavily indebted rich nations.
The agency reduced Japan's long-term sovereign debt rating by one notch to AA minus, three levels below the highest possible rating. It said Japan's fast-aging population, persistent deflation and the loss of the coalition's upper house majority had compounded the government's fiscal challenge.
Politicians and credit ratings agencies have been warning for years that Japan needs to lower its public debt, by far the worst among rich nations at double the size of its $5 trillion economy, but progress has proved elusive.
7:41AM :
New MBS Commentary Post
Featured Market Discussion
A recap of the featured comments from the Live Discussion on the MBSonMND Dashboard
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Bert Swyers : "guys we just need to face the fact that rates are going up regardless of any bond friendly data. the vigilantes are dead set to bring on this jobless recovery "
Jason York : "anyone have a good way to find out who the MI carrier is for a customer's loan, if they don't have a statement?"
Terry Colabrese : "if WF offers it on the wholesale side, it will be down the road and not within the next month, or two."
Matt Hodges : "wish WF would lower from 640 back to 600 - we are missing many well qualified FHA borrowers in corresp & wholesale"
Jason York : "i think it will stay retail"
Christopher Max : "any clue if Wells is rolling that out to Correspondent or WHolesale?"
Jill Statz : "Wells retail is the only one that I know of right now"
Robert Rippy : "Anyone doing the FHA loan with scores in the 500's?"
Adam Quinones : " headline risk is on TSYs Aaron, spread risk is on MBS...mortgages will follow the direction of TSYs but may outperform bc of the headline pressures on TSYs. This would lead investors toward MBS "
Aaron Meyer : "AQ MG will the treasury altering its borrowing in the coming months to buy more time for the debt ceiling have a negative impact on MBS? My guess is yes and if so how much?"
Robert Rippy : "Now when I do a GFE worksheet it is not calculating the funds needed by the borrower correctly. It is erroneously showing $2,000+ being paid by a third party. I have to manually go in and zero that out or my GFE is not correct."
Robert Rippy : "I downloaded the 7.4 version"
Matt Hodges : "we'll get it - Calyx is having tech problems, so thanks anyway"
Jason York : "not that I really saw working through a file, I can send you the sheet that tells all the changes"
Matt Hodges : "i can't down load it - any major changes?"
Jason York : "we did"
Matt Hodges : "has anyone downloaded the update 7.4 Calyx?"
Victor Burek : "flagstar about .125 worse than yesterday"
Lion : "Wanted to thank the WarRoom again as I locked on Tuesday and while I normally let everyone know when I do because in the past you know if the Lion locks a loan rates are sure to go down. But, to my surpirse they climbed instead. Thanks for being there for me, WR."
Matthew Graham : "yeah, looks like tsy's saw stocks weren't gonna go for 1300 S&P and felt a bit more comfortable"
Victor Burek : "pending sales much higher"
Joe Ridings : "i am fine with less per loan if bank is adv for more volume"
Victor Burek : "s&p about to break 1300"
Steve : "quite frankly Joe - I dont think they have any clue how they want to set up pay scale and I can guarantee you that no matter what direction they take it, we are going to be losing pay"
Steve : "been hearing anything from 50-75 bps, but nothing concrete and no word on incentives, bonus, etc"
Brett Boyke : "Nothing yet"
Steve : "we still dont have solid feedback on how its going to change"
Joe Ridings : "my new bank is asking for input from us. thank goodness."
Joe Ridings : "can i get some feed back on how you guys pay plans have changed for the new law in april. what bps,guarantees ect?"
Brett Boyke : "LO exhaustion being seen as well"
Adam Quinones : "like jet lag"
Adam Quinones : "range exhaustion getting worse for bond traders."
Matthew Graham : "there's a bit of technical support at 3.44+ if tsy's continue rising here. then of course, 3.47+ would be the next stop on the pain train (potential layover at 3.46)"
Matthew Graham : "has everyone had a chance to pull up the 2 day chart in 10yr yields yet? see the post-FOMC grindage into 3.42?"
Adam Quinones : "yes. DC too."
B-C : "hard to get to work with no transportation"
B-C : "AQ does NYC being shut down today mean anything?"
Matthew Graham : "maybe in conjunction with supportive data tomorrow, but it would have to be pretty damn supportive"
Victor Burek : "we need 3.3's first... "
Matthew Graham : "yeah, I think a good auction later could very well do it, but I don't think it has range breaking potential at this point"
Mike Drews : "i'm thinking we need more than a good auction to hit 3.2"