MBS Pricing Snapshot

Bond markets began the overnight session with a "risk-on" move during Asian hours as both Treasury yields and equities futures moved back towards Monday morning levels. 10's never went over 1.99 though, and began easing gently lower into domestic hours, helped along by a bit of a "risk-off" move during European hours.

This got MBS and Treasuries in the door just barely in the green and though we slipped back briefly into the red, the weakness was short-lived. That said, there hasn't been a triumphant romp back into stronger territory either... Fannie 3.0s are up 2 ticks at 103-16 and 10yr yields down half a bp at 1.9696.

Consumer Confidence was much weaker-than-expected, but has had minimal impact outside some volatility in equities. Perhaps markets are willing to discount the data as greatly affected by payroll tax changes (this is suggested in the report itself).

Whatever the case, it's disconcerting to see trading levels shy away from resistance levels so far this morning as they mark noticeable pivot points with Friday's weakest levels (MBS were a bit weaker on Friday afternoon, but they had wilted quite a bit vs TSYs into the weekend, and there was a prominent low at 103-18 in the morning, now today's high).

So we'll keep a close eye on these pivot points (103-18 in MBS and 1.95 in 10yr yields for the rest of the session. Scheduled Fed QE4 buying is going on at the moment and the 5yr Auction results hit at 1pm. The green is good, but the absence of a break through the aforementioned resistance levels is a bit ominous so far. Stay on guard.

(corrects headline confidence to 58.6)

- Confidence 58.6 vs 64.0 Consensus
- "Present Situation" 57.3 vs 64.6 previously
- "Expectations" 59.5 vs 68.1 previously
- Confidence and Expectations Lowest since late 2011
- "Jobs hard-to-get" rises for first time since September


The monthly Consumer Confidence Survey®, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a leading global provider of information and analytics around what consumers buy and watch. The cutoff date for the preliminary results was January 17.

Says Lynn Franco, Director of Economic Indicators at The Conference Board: “Consumer Confidence posted another sharp decline in January, erasing all of the gains made through 2012. Consumers are more pessimistic about the economic outlook and, in particular, their financial situation. The increase in the payroll tax has undoubtedly dampened consumers’ spirits and it may take a while for confidence to rebound and consumers to recover from their initial paycheck shock.”

- Confidence 58.6 vs 64.0 Consensus
- "Present Situation" 57.3 vs 64.6 previously
- "Expectations" 59.5 vs 68.1 previously
- Confidence and Expectations Lowest since late 2011
- "Jobs hard-to-get" rises for first time since September


The monthly Consumer Confidence Survey®, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a leading global provider of information and analytics around what consumers buy and watch. The cutoff date for the preliminary results was January 17.

Says Lynn Franco, Director of Economic Indicators at The Conference Board: “Consumer Confidence posted another sharp decline in January, erasing all of the gains made through 2012. Consumers are more pessimistic about the economic outlook and, in particular, their financial situation. The increase in the payroll tax has undoubtedly dampened consumers’ spirits and it may take a while for confidence to rebound and consumers to recover from their initial paycheck shock.”

- 20 city, adjusted +0.6, as expected
- Non-adjusted -0.1 vs 0.0 consensus
- Previous report revised to -0.2, non-adjusted
- Market reaction

Data through November 2012, released today by S&P Dow Jones Indices for its S&P/Case-Shiller Home Price Indices, showed home prices rose 4.5% for the 10-City Composite and 5.5% for the 20-City Composite in the 12 months ending in November 2012.