MBSonMND: MBS MID-DAY
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FNMA 3.5
95-06 : -0-13
FNMA 4.0
99-22 : -0-10
FNMA 4.5
103-09 : -0-07
FNMA 5.0
106-05 : -0-04
GNMA 3.5
96-19 : -0-13
GNMA 4.0
101-21 : -0-08
GNMA 4.5
105-14 : -0-05
GNMA 5.0
108-10 : -0-02
FHLMC 3.5
95-14 : +0-00
FHLMC 4.0
99-19 : -0-10
FHLMC 4.5
103-03 : -0-08
FHLMC 5.0
105-32 : -0-04
Pricing as of 11:04 AM EST
Morning Market Updates
A recap of MBS Market Updates provided by MND Analysts and streamed live to the MBSonMND Dashboard .
11:35AM  :  Loan Pricing Suspended. Rate Sheets Worse
Loan pricing will deteriorate this morning. Many lenders have already suspended rate sheets, presumably to take down new indications and reprice for the worse. With the bond market already acting increasingly illiquid as more and more investors run for an early exit, this is one of those days where secondary can pick up a few extra bps on poorly timed locks by baking extra margin into rate sheets.

10:33AM  :  ECON: ECRI Weekly Leading Index at 29 Week Low
(Reuters) - A measure of future U.S. economic growth fell to a 29-week low in the latest week, while an annualized growth gauge dropped to a 27-week low, a research group said on Friday. The Economic Cycle Research Institute, a New York-based independent forecasting group, said its Weekly Leading Index fell to 126.4 in the week ended June 24 from 127 the previous week. That is its lowest point since December 3, 2010. The index's annualized growth rate also dropped, to 2 percent from 2.9 percent a week earlier, reaching its lowest point since December 17, 2010. "With WLI growth experiencing a pronounced and pervasive decline for 10 straight weeks from its mid-April peak to a 27-week low, the economy is set for a sustained slowdown in growth," said ECRI's Co-founder Lakshman Achuthan.
10:11AM  :  ECON: New Orders, Production and Employment Growing
(BUSINESS WIRE)--Economic activity in the manufacturing sector expanded in June for the 23rd consecutive month, and the overall economy grew for the 25th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report On Business. The report was issued today by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management™ Manufacturing Business Survey Committee. “The PMI registered 55.3 percent, an increase of 1.8 percentage points from May, indicating expansion in the manufacturing sector for the 23rd consecutive month. New orders and production were both modestly up from last month, and employment showed continued strength with an increase of 1.7 percentage points to 59.9 percent. The rate of increase in prices slowed for the second consecutive month, dropping 8.5 percentage points in June to 68 percent. This follows a similar reduction of 9 percentage points in the Prices Index in May, and is the lowest figure since August 2010 when the index registered 61.5 percent. While the rate of price increases has slowed and the list of commodities up in price has shortened, commodity and input prices continue to be a concern across several industries.” PERFORMANCE BY INDUSTRY Of the 18 manufacturing industries, 12 are reporting growth in June, in the following order: Miscellaneous Manufacturing; Printing & Related Support Activities; Computer & Electronic Products; Paper Products; Textile Mills; Petroleum & Coal Products; Nonmetallic Mineral Products; Transportation Equipment; Chemical Products; Fabricated Metal Products; Machinery; and Electrical Equipment, Appliances & Components. The five industries reporting contraction in June are: Plastics & Rubber Products; Apparel, Leather & Allied Products; Primary Metals; Wood Products; and Food, Beverage & Tobacco Products.
10:07AM  :  ECON: Construction Spending Down For 6th Straight Month
(Reuters) - U.S. construction spending fell for a sixth straight month during May to its lowest in more than a decade, according to a Commerce Department report on Friday that underlined the soft pace of activity in building trades that normally are major employers. Spending on new construction fell 0.6 percent after a matching revised 0.6 percent April drop that previously was reported as a 0.4 percent increase. Economists surveyed by Reuters had forecast May construction spending would be flat. Total May spending was at a seasonally adjusted annual rate of $753.48 billion, the lowest rate since $751.4 billion in September 1999, the department said. Spending on both public and private building projects weakened in May. Overall private construction fell 0.4 percent and, within that category, spending on new homes and apartment buildings fell 2.1 percent. Public construction spending for projects like improved highways and streets, new schools and transportation projects declined 0.8 percent in May after a 2.4 percent April fall. (Reporting by Glenn Somerville, Editing by Chizu Nomiyama)
10:05AM  :  ALERT: Bond Markets Weaken Following Econ. Negative Reprices.
It's not yet clear where trading will level off following a stronger than expected ISM Report, but negative reprices or weaker initial rate sheets are at risk as MBS fell 5/32nds following the data. 10yr notes moved immediately to 3.21 support but are currently at 3.188.
9:59AM  :  ECON: Consumer Sentiment Worsens in June
(Reuters) - U.S. consumer sentiment worsened in June on jitters about the economic outlook and spending is likely to remain lackluster in the long-term, a survey released on Friday showed. Falling gasoline prices stabilized consumers' view of their current economic conditions, but expectations remained gloomy, the Thomson Reuters/University of Michigan survey showed. The final reading for the consumer sentiment index came in at 71.5, down from 74.3 the month before. It was a hair below the preliminary June figure of 71.8 and shy of the median forecast for 71.9 among economists polled by Reuters. While small spending gains can be expected in the second half of the year, the trend is more likely to vary between lackluster and zero than lackluster and robust over the next several years, the survey said. "Resurgent spending is not on the horizon, nor is widespread retrenchment," survey director Richard Curtin said in a statement. "Importantly, the consumer no longer has the financial wherewithal to power the economy into overdrive." The survey's barometer of current economic conditions edged up to 82.0 from 81.9 in May. The gauge of consumer expectations fell to 64.8 from 69.5 and below forecasts for 66.6. Consumers one-year inflation outlook improved, falling to 3.8 percent from 4.1 percent. But the five-to-10-year inflation outlook inched up to 3.0 percent from 2.9 percent. (Reporting by Leah Schnurr, Editing by Chizu Nomiyama)
9:13AM  :  Bonds Slightly Stronger as Market Awaits ISM Data
Fannie Mae 4.0 Coupons are 5/32nds better vs yesterday's closing levels, suggesting slightly improved rate sheet offerings this morning. Treasuries are improved overnight as well. (Reuters) - The prices of U.S. Treasuries rose ahead of the release of key U.S. manufacturing data, but trading volume was light, analysts said. Lower commodity prices also helped drive the moderate bid for Treasuries, but traders were mostly waiting for the Institute for Supply Management's June manufacturing reading, which would either confirm a slowdown in manufacturing activity or offer a strong new source of hope for continuing economic recovery. A slowdown in manufacturing would be good for bonds, but regional U.S. manufacturing measures have shown a mix of weakness and surprising strength, making the ISM nation-wide numbers hard to predict. Globally, however, manufacturing activity has slowed.
7:50AM  :  New MBS Commentary Post

Featured Market Discussion
A recap of the featured comments from the Live Discussion on the MBSonMND Dashboard .
Christopher Stevens  :  "just rec'd chase reprice for the worse (USDA)"
Matt Devine  :  "sounds like it. i'll def look into it. thanks again"
John Rodgers  :  "shoot me an email and i'll help you set it up"
John Rodgers  :  "At those loan levels you can do it. The other lender probably didn't know what they were talking about. "
Matt Devine  :  "yeah I knew that. i was referred this loan from another lender that send they tried VA and he wasnt eligible. i will look further into though. thanks JR"
John Rodgers  :  "You need a 25% guarantee therefore 25% of 165k is 41250"
John Rodgers  :  "When he bought his first home using VA he probably used 36k of entitlement"
John Rodgers  :  "Every Vet gets bonus entitlement for loans above 144k so the 165k is good enough therefore he has 104250 in VA entitlement. There are no limit on the number of VA loans you can have at one time. "
John Rodgers  :  "I'm going to make you a hero"
John Rodgers  :  "Okay how much did he have the old VA loan for"
John Rodgers  :  "Devine, what is the price of the new home."
JudeB  :  "Matt, FHA Handbook 4155.1: 4.B.2.c-d Yes he can"
Victor Burek  :  "yes...would qualify then"
Matt Devine  :  "texas to kansas"
Victor Burek  :  "how far is the move?"
Matt Devine  :  "i have a borrower relocating due to his job and he currently has an FHA mortgage, is he able to obtain a 2nd FHA mortgage since he is relocating?"
Victor Burek  :  "The one and only clearest indication of just how effective the recovery and QE2 in general has been, comes courtesy of the USDA, whose just released update of April participation in Supplemental Nutrition Assistance Program (SNAP), better known as "foodstamps", shows yet another record, this time 44.647 million people, an increase from May's 44.587 million. "
Matthew Graham  :  "in fact CS, I'd almost say volume is low enough to cast a bit of doubt on the ability to "confirm" a breakout of 3.2"
Matthew Graham  :  "could be better"
Christopher Stevens  :  "hows volume?"
Matthew Graham  :  "next fight on the card: 3.223 vs 3.208."
Matthew Graham  :  "potentially unfriendly short term pivot at 3.208... "
Matthew Graham  :  "RTRS- U.S. TREASURY SAYS AUG. 2 STILL THE DATE WHEN GOVERNMENT EXPECTS TO EXHAUST BORROWING AUTHORITY DUE TO DEBT CEILING IMPASSE "
Matthew Graham  :  "I also have 3.215 on a technical line "
Adam Quinones  :  "3.24 VB"
Victor Burek  :  "next stop?"
Matthew Graham  :  "10's are back in line with their highs. testing testing...."
Matthew Graham  :  "JOE MANIMBO, MARKET ANALYST, TRAVELEX GLOBAL BUSINESS PAYMENTS IN WASHINGTON "The data, being better than expected, is consistent with the Fed's view that the slowdown won't last. That's certainly encouraging news and as a result, we have seen the dollar push broadly higher. Given the rally that we have seen in some of those high-flying assets this week, investors are likely booking some profits as they head into the long holiday weekend.""
Matthew Graham  :  "MICHAEL GAPEN, CHIEF U.S. ECONOMIST, BARCLAYS CAPITAL, NEW YORK "We think it is reflective of a rebound in the manufacturing sector. The number is above expectations, higher than it was in May. If you look at the subcomponents, the main increase came in inventory, which suggests that firms think demand will rebound. Production still looks good, new orders still look good. It looks like there was a temporary slowdown, perhaps due to supply disruptions in Japan. "It's a June number so it i"
Matthew Graham  :  "TIM GHRISKEY, CHIEF INVESTMENT OFFICER, SOLARIS ASSET MANAGEMENT, BEDFORD HILLS, NEW YORK: "The first thing we all said here was the expectations probably had been lowered for ISM manufacturing over the past couple of months, and that set up for a number that could be beat. "It does appear there is some acceleration here in the manufacturing side, and that's good news because really the analysis of the mid-cycle slowdown we were experiencing was on the manufacturing side and related to t"
Victor Burek  :  "flagstar .25 worse"
Matthew Graham  :  "DAVID ADER, HEAD OF GOVERNMENT BOND STRATEGY AT CRT CAPITAL GROUP, STAMFORD, CONNECTICUT "A big gain to ISM, beyond expectations, with employment up too. Prices paid have dropped. Inventories were the big contributor, which detracts somewhat from the overall strength here given the outpeformance versus new orders. The details are not as robust as the headline as that inventory gain was the bulk of the overall increase. "The market is off with 5s underperforming, though no drama in the pr"
Matthew Graham  :  "PIERRE ELLIS, SENIOR ECONOMIST, DECISION ECONOMICS, NEW YORK "It's not bad news, but it's odd in that virtually the entire increase was driven by a rise inventories. The absence of strength in new orders does not promote confidence. "There's no outright bad news here. Employment got firmer and that's encouraging. The report indicates that the weakness that showed up in the Empire State and Philadelphia Fed surveys was purely regional. "The Fed can breathe a sigh of relief, but there'"
Matthew Graham  :  "ROBERT BRUSCA, CHIEF ECONOMIST, FACT AND OPINION ECONOMICS, NEW YORK "It's too soon to say whether the soft patch is over. We had such a big drop last month. We are just seeing some of the retracement. This takes some of the sting out of last month's drop.""
Matthew Graham  :  "Here are some "instant views" from Reuters:"
Matthew Graham  :  "yeah, 3.2 to 3.21. that's what we're watching now if bonds weaken again. if it breaks again, that = bad"
Adam Quinones  :  "yes."
Oliver S. Orlicki  :  "aq, we still looking at 3.20 as our pivot?"
Michael Owens  :  "What the fudge?"
Matthew Graham  :  "- US MAY CONSTRUCTION SPENDING -0.6 PCT (CONSENSUS UNCHANGED) TO $753.5 BLN VS APRIL -0.6 PCT (PREV +0.4 PCT) "
Matthew Graham  :  "RTRS - ISM U.S. MANUFACTURING EMPLOYMENT INDEX 59.9 IN JUNE VS 58.2 IN MAY "
Matthew Graham  :  "RTRS - ONE-YEAR INFLATION EXPECTATIONS AT LOWEST SINCE FEBRUARY "
Matthew Graham  :  "RTRS - 5-YEAR INFLATION OUTLOOK FINAL JUNE 3.0 PCT VS PRELIMINARY JUNE 3.0 PCT "
Matthew Graham  :  "RTRS - 1-YEAR INFLATION OUTLOOK FINAL JUNE 3.8 PCT VS PRELIMINARY JUNE 4.0 PCT "
Matthew Graham  :  "RTRS - 12-MONTH ECONOMIC OUTLOOK INDEX FINAL JUNE 74 VS PRELIMINARY JUNE 78 "
Matthew Graham  :  "RTRS - 12-MONTH ECONOMIC OUTLOOK INDEX FINAL JUNE 74 VS PRELIMINARY JUNE 78 "
Matthew Graham  :  "RTRS - CONSUMER EXPECTATIONS INDEX FINAL JUNE 64.8 (CONSENSUS 66.6) VS PRELIMINARY JUNE 66.8 "
Matthew Graham  :  "RTRS- THOMSON REUTERS/U. OF MICH CURRENT CONDITIONS INDEX FINAL JUNE 82.0 (CONSENSUS 79.6) VS PRELIMINARY JUNE 79.6 "
Matthew Graham  :  "THOMSON REUTERS/U. OF MICH US CONSUMER SENTIMENT FINAL JUNE 71.5 (CONSENSUS 71.9) VS PRELIMINARY JUNE 71.8 "
Adam Quinones  :  "there's a line of demarcation at 1.446. Breaking that will likely lead to tech-based selling. Bad for stocks, good for bonds."