MBSonMND: MBS MID-DAY
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Morning Market Updates
A recap of MBS Market Updates provided by MND Analysts and streamed live to the MBSonMND Dashboard
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10:30AM :
MBS Touch Best Levels Of The Morning
Our previous inclination to pay attention to the stock lever is seeming well-founded. After falling at the open, stocks rebounded and headed back toward the support through which they'd fallen, but that previous support line provided a resistance bounce, making it a diagonal pivot of sorts. When stocks failed that breakthrough, bonds moved to their best levels of the day, with 10yr notes at 3.52 and FNCL 4.5's at 101-08. If this tight range of 101-06 to 101-08 continues it should be good for any lender rate sheets that aren't out yet.
10:05AM :
DATA: Consumer Confidence Higher
*** FEB CONSUMER CONFIDENCE INDEX 70.4 VS JAN REVISED 64.8 (PREVIOUS 65.6) - CONFERENCE BOARD
*** CONSUMER CONFIDENCE INDEX MEDIAN FORECAST FROM REUTERS FOR FEBRUARY WAS 65.0
*** CONSUMER PRESENT SITUATION INDEX IN FEB 33.4 VS JAN REVISED 31.1 (PREVIOUS 31.0)
*** CONSUMER EXPECTATIONS INDEX 95.1 IN FEB VS JAN REVISED 87.3 (PREVIOUS 80.3) - CONFERENCE BOARD
*** JOBS HARD-TO-GET INDEX 45.7 IN FEB VS JAN REVISED 47.0 (PREVIOUS 43.4)--CONFERENCE BOARD
*** 1-YEAR CONSUMER INFLATION RATE EXPECTATIONS 5.6 PCT IN FEB VS JAN 5.5 PCT (PREVIOUS 5.5)
*** U.S CONSUMER CONFIDENCE INDEX AT HIGHEST SINCE FEB 2008
*** CONSUMER EXPECTATIONS INDEX AT HIGHEST SINCE DEC 2006
*** 1-YEAR CONSUMER INFLATION RATE EXPECTATIONS AT HIGHEST SINCE JUNE 2009
10:02AM :
DATA: Richmond Fed Manufacturing Shipments Rise
COMPOSITE MANUFACTURING INDEX +25 IN FEB VS +18 IN JAN *** MANUFACTURING SHIPMENTS INDEX +29 IN FEB VS +23 IN JAN *** SERVICES REVENUES INDEX +11 IN FEB VS +12 IN JAN
9:42AM :
Small Improvements Follow Weak Stock Market Open
The S&P shot down to 1325 shortly after it opened, it's lowest point in a week and biggest loss since 1/28. Bonds improved slightly at the same time with 10's at 3.533 and FNCL 4.5's at 101-07. A firmly connected stock lever isn't necessarily the assumption, but with somewhat of a connection in recent minutes as well as the generally larger-than-normal movements, it's something we should watch for.
9:30AM :
Bonds Off Their Best Levels Of The Morning
10yr yields are slightly higher than their opening levels: 3.537 vs 3.52, but this uptick has been largely drama-free. In fact, those 3.52 lows were precisely in line with the bullish trend channel we've been discussing. FNCL 4.5's are at 101-06, which is only a tick off Thursday's multi-week highs. The stability of gains this morning in combination with the fact that the 3 day weekend is behind us should help rate sheets come out strong.
9:04AM :
DATA: Case Shiller Home Prices Continue Downward Trend
*** DEC HOME PRICES IN 20 METRO AREAS -0.4 PCT SEASONALLY ADJ (CONSENSUS -0.4 PCT) VS -0.6 PCT IN NOV- S&P/CASE-SHILLER
*** DEC 20-METRO AREA HOME PRICES -1.0 PCT (CONSENSUS -0.7 PCT) VS -1.0 PCT IN NOV-S&P/CASE-SHILLER
*** DEC 20-METRO AREA HOME PRICES -2.4 PCT (CONSENSUS -2.3 PCT) FROM YEAR AGO -- CASE-SHILLER
*** DEC HOME PRICES IN 10 METRO AREAS -0.4 PCT SEASONALLY ADJUSTED VS -0.4 PCT IN NOV - CASE-SHILLER
*** HOME PRICES IN 10 METRO AREAS -0.9 PCT IN DEC VS -0.8 PCT IN NOV - S&P/CASE-SHILLER
*** DEC HOME PRICES IN 10 METROPOLITAN AREAS -1.2 PCT FROM YEAR AGO - S&P/CASE-SHILLER
*** HOME PRICES IN Q4 2010 -3.9 PCT FROM Q3 2010 - S&P/CASE-SHILLER NATIONAL INDEX
*** HOME PRICES IN Q4 2010 -4.1 PCT FROM Q4 2009 - S&P/CASE-SHILLER NATIONAL INDEX
8:36AM :
Bonds Open In Better Territory. First Data At 9am
Ongoing geopolitical tension is keeping the flight-to-safety bid strong this morning, pushing 10yr yields to the most bullish end of their current trend channel. That's good for a yield of 3.528. FNCL 4.5's are up 7 ticks versus Friday's close at 101-08. Case Shiller Home price index is coming up at 9am, followed by Consumer Confidence at 10am.
8:17AM :
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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Steven Stone : " After three consecutive months of increases, US commercial real estate prices as measured by Moody's/REAL National -- All Property Price Index (CPPI) declined by 0.9% in December. For the calendar year 2010, prices fell 2.1%, but the index has recovered by 5.5% since reaching its recession level low in August 2010.
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Matthew Graham : "interestingly enough, stocks seem to be meeting their first resistance since the bounce back up."
Matthew Graham : "S&P is now back at 1335, testing the pivot it previously broke this morning (trendline from 2/10 lows and 2/15 lows)"
Adam Quinones : "here is the asterisk you need to know about Consumer Confidence: As of February 2011, The Conference Board has changed survey providers from TNS to The Nielsen Company for ongoing CCS operational support. Nielsen uses a mail survey specifically designed for the Consumer Confidence Survey. The new design uses a probability-design random sample, post-stratification weights (for gender, income, geography, and age), and the U.S. Census X-12 seasonal adjustment. The CCS concepts, questions and mail s"
Adam Quinones : "also should be noted that the Conference Board has spent the last five months testing new survey providers. so the sampling style has changed."
Adam Quinones : "Says Lynn Franco, Director of The Conference Board Consumer Research Center: “The Consumer Confidence Index is now at a three-year high (Feb. 2008, 76.4), due to growing optimism about the short-term future. Consumers’ assessment of current business and labor market conditions has improved moderately, but still remains rather weak. Looking ahead, consumers are more positive about the economy and their income prospects, but feel somewhat mixed about employment conditions.”"
Adam Quinones : "Consumers were mixed about the job market. Those expecting more jobs in the months ahead edged down to 19.8 percent from 20.8 percent, however, those anticipating fewer jobs decreased to 15.4 percent from 21.2 percent. The proportion of consumers expecting an increase in their incomes rose to 17.3 percent from 15.3 percent."
Steven Stone : "The differential between those seeing jobs as plentiful and those seeing them as hard to get improved to -40.8% from -42.4%, still very negative but showing some response to recent declines in the unemployment rate. In the 6 month expectations breakdown, the balance between those seeing more jobs versus those seeing fewer jobs turned positive at 4.4% versus -0.4% in January, the change due to a smaller number seeing fewer jobs rather than a greater number seeing more. Plans to buy autos saw a"
Victor Burek : "last time consumer confidence this high was feb. 2008"
Victor Burek : "70.4 vs 65.1"
Victor Burek : "consumer confident much higher"
Adam Quinones : "modest profit taking to be expected in bond market this AM."
Matthew Graham : "not uncommon rally behavior"
Matthew Graham : "MBS is a bit wider into the rally"
Matthew Graham : "you're right JR"
John Rodgers : "MBS don't seem to be keeping pace or am I wrong? "
Gus Floropoulos : "if this mornings action is any indication, we should see a successful auction
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Matthew Graham : "because I guess high volume with a major sell off wouldn't be so bullish"
Matthew Graham : "well, ha! I suppose I would also add to that "and if current levels prevail""
Matthew Graham : "If domestic volume is high today, it will be one of the first legitimate bullish signs in a while"
Matthew Graham : "indeed "
Gus Floropoulos : "trend channel for the last 10 days looking very bullish"
Matthew Graham : "but interestingly, the overnight volume in treasuries today is as high as it's been since around that time"
Matthew Graham : "yeah, not clear yet on how pertinent that pivot will be compared to more recent stuff Gus"
Gus Floropoulos : "or just happy to see the yield under 357"
Gus Floropoulos : "are we looking for a breakdown of the 3.53 pivot as our next target?"
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