The day has been woefully uneventful so far, at least with respect to what it might have been... Rather than get any sort of meaningful "vote" from market movements as to which way the momentum will shift, we're left with what's shaping up to be a mostly sideways day. We're thankful that it's at least one of those sideways days that leaves bond markets in slightly better territory. Fannie 3.5's have explored 103-00+ prices on several occasions and 10yr yields have tested below 2.15 a few times. We'd say that 10's holding support at 2.16's would basically be a non-event, and MBS wouldn't much care. In other words, unless 10yr yields break 2.168 or 2.147, the day is over.
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Morning Market Updates
A recap of MBS Market Updates provided by MND Analysts and streamed live to the MBS Live Dashboard.
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Make sure you're signed up for Reprice Alerts to be notified by email or text the instant these are issued. You can manage all MBS Live email and text notifications thru the 'My Alerts' menu option at the bottom of the dashboard or by clicking here.
10:00AM :
ECON: Consumer Sentiment Stronger Than Expected
- RTRS - US Consumer Sentiment Final March 76.2 (Consensus 74.7) Vs Preliminary March 74.3
- RTRS - Current Conditions Index Final March 86.0 (Consensus 84.5) Vs Preliminary March 84.2
- RTRS - Consumer Expectations Index Final March 69.8 (Consensus 68.0) Vs Preliminary March 68.0
- RTRS - 12-Month Economic Outlook Index Final March 79 Vs Preliminary March 74
- RTRS - 1-Year Inflation Outlook Final March 3.9 Pct Vs Preliminary March 4.0 Pct
- RTRS - 5-Year Inflation Outlook Final March 3.0 Pct Vs Preliminary March 3.0 Pct
- RTRS - Consumer Sentiment Index And Current Conditions Index At Highest Since February 2011
9:50AM :
ECON: Chicago Purchasing Managers Index Weaker Than Expected
*PMI at 62.2 vs 63.0 consensus, 64.0 in Feb
*New Orders 63.3 vs 69.2 last time
*Prices Paid 70.1 vs 65.6 in Feb
*Employment Index 56.3 vs 64.2 last time
The Chicago Purchasing Managers reported the March Chicago Business Barometer paused after February's ten month high. While slowing, the Chicago Business Barometer marked its fifth month above 60, a 2-1/2 year period of expansion and trend data improved. Increases were seen in five of eight Business Activity Indexes, highlighted by significant advances in Prices Paid and Inventories, and a notable lengthening in lead times for Production Material.
*New Orders 63.3 vs 69.2 last time
*Prices Paid 70.1 vs 65.6 in Feb
*Employment Index 56.3 vs 64.2 last time
The Chicago Purchasing Managers reported the March Chicago Business Barometer paused after February's ten month high. While slowing, the Chicago Business Barometer marked its fifth month above 60, a 2-1/2 year period of expansion and trend data improved. Increases were seen in five of eight Business Activity Indexes, highlighted by significant advances in Prices Paid and Inventories, and a notable lengthening in lead times for Production Material.
9:24AM :
ALERT:
Apathy Monster Strikes! Bond Markets Slightly Better. Volume LOW
So far, this morning is not living up to any expectations or hopes we had for it to act as some sort of tie-breaking vote as to continue the rally down to range boundaries or start a bounce back a few bps early. It's a lot like getting told that to meet for a special gathering on the 9th green at 9pm only to be met by the sprinklers turning on.
Despite the Euro-zone raising their combined firewalls from €500 to €700 bln, as well as a smattering of austerity-related headlines out of Spain, overnight volume and volatility were low. But the most surprising part of the morning has been the lack of a reaction to the Incomes and Outlays report.
First of all, let's be clear... Bond markets are slightly improved, and we're happy about that. But we've basically been sideways and in excruciatingly low volume. The whole thing is totally noncommittal whereas by all rights, it could have been the opposite. A +0.8 spending figure is enough to revise GDP estimates higher, but markets aren't trading it that way... they're not really trading much of anything in any way.
If the Incomes/Outlays report didn't do the trick, we're not overly-hopeful that Chicago PMI at 9:45 or Consumer Sentiment at 9:55 are the two epic pieces of market data that will finally provide the big picture for market movement this morning. After that, the day is basically over with the exception of Fed Twist buying from 1015-1100am. Either way, markets already missed their chance to "show up" today for the one event where we expected to see them (unless they're running really late!). Joke's on us I suppose... Maybe NFP week ahead will do the trick...
Despite the Euro-zone raising their combined firewalls from €500 to €700 bln, as well as a smattering of austerity-related headlines out of Spain, overnight volume and volatility were low. But the most surprising part of the morning has been the lack of a reaction to the Incomes and Outlays report.
First of all, let's be clear... Bond markets are slightly improved, and we're happy about that. But we've basically been sideways and in excruciatingly low volume. The whole thing is totally noncommittal whereas by all rights, it could have been the opposite. A +0.8 spending figure is enough to revise GDP estimates higher, but markets aren't trading it that way... they're not really trading much of anything in any way.
If the Incomes/Outlays report didn't do the trick, we're not overly-hopeful that Chicago PMI at 9:45 or Consumer Sentiment at 9:55 are the two epic pieces of market data that will finally provide the big picture for market movement this morning. After that, the day is basically over with the exception of Fed Twist buying from 1015-1100am. Either way, markets already missed their chance to "show up" today for the one event where we expected to see them (unless they're running really late!). Joke's on us I suppose... Maybe NFP week ahead will do the trick...
8:37AM :
ECON: Personal Consumption Expenditures Rise, Income Lower
*spending up 0.8 vs 0.6 consensus
*income up 0.2 vs 0.4 consensus
*core PCE price index +0.1, as expected
*Core PCE year-over-year up 2.3 vs 2.4 consensus
Personal income increased $28.2 billion, or 0.2 percent, and disposable personal income (DPI) increased $18.9 billion, or 0.2 percent, in February, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $86.0 billion, or 0.8 percent. In January, personal income increased $26.5 billion, or 0.2 percent, DPI increased $5.0 billion, or less than 0.1 percent, and PCE increased $40.9 billion, or 0.4 percent, based on revised estimates.
Real disposable income decreased 0.1 percent in February, compared with a decrease of 0.2 percent in January. Real PCE increased 0.5 percent, compared with an increase of 0.2 percent.
*income up 0.2 vs 0.4 consensus
*core PCE price index +0.1, as expected
*Core PCE year-over-year up 2.3 vs 2.4 consensus
Personal income increased $28.2 billion, or 0.2 percent, and disposable personal income (DPI) increased $18.9 billion, or 0.2 percent, in February, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $86.0 billion, or 0.8 percent. In January, personal income increased $26.5 billion, or 0.2 percent, DPI increased $5.0 billion, or less than 0.1 percent, and PCE increased $40.9 billion, or 0.4 percent, based on revised estimates.
Real disposable income decreased 0.1 percent in February, compared with a decrease of 0.2 percent in January. Real PCE increased 0.5 percent, compared with an increase of 0.2 percent.
Featured Market Discussion
A recap of the featured comments from the Live Chat on the MBS Live Dashboard.
Matthew Graham : "yeah, 11am."
Brent Borcherding : "Fed buying then we're done today?"
Brent Borcherding : "It just makes me angry, but you know this."
Matthew Graham : "yeah, I see deceleration. figured I'd post a bullish view to counterbalance the innate bearishness of the average MBS watcher"
Brent Borcherding : "Or its the trailing and is the beginning of the slow down, with more slowed growth ahead for Europe. 2 can play this game."
Matthew Graham : "a more bullish-leaning perspective on Chi-PMI : "CHRISTOPHER LOW, CHIEF ECONOMIST, FTN FINIANCIAL, NEW YORK
"It's down a little bit more than expected but anything over 60 is respectable. New orders weakened, but dropping from 69 to 63, again, is not a big deal. The real way to look at these numbers is five months in a row over 60. Chicago is more sensitive to export weakness than the national index and given what's going on in Europe and Asia I think it's remarkable that the number is wher"
Brent Borcherding : "It was just an extension of the previous rule...came out in December of 2011 good through 2012."
Matthew Graham : "RTRS- THOMSON REUTERS/U. OF MICH CURRENT CONDITIONS INDEX FINAL MARCH 86.0 (CONSENSUS 84.5) VS PRELIMINARY MARCH 84.2 "
Matthew Graham : "RTRS - THOMSON REUTERS/U. OF MICH CONSUMER SENTIMENT INDEX AND CURRENT CONDITIONS INDEX AT HIGHEST SINCE FEBRUARY 2011 "
Matthew Graham : "RTRS- THOMSON REUTERS/U. OF MICH US CONSUMER SENTIMENT FINAL MARCH 76.2 (CONSENSUS 74.7) VS PRELIMINARY MARCH 74.3 "
Matt Hodges : "okay, with the normal restrictions of not having a realtor selling, etc?"
Brent Borcherding : "I'm certain they do."
Matt Hodges : "Is FHA still allowing less than 90 day flips?"
Jude Bridwell : "tough to break that 2.15 barrier"
SMTM : "103"
Dmitriy S : "bring on 103!"
Brent Borcherding : "whiff"
Matthew Graham : "RTRS - CHICAGO PMI EMPLOYMENT INDEX 56.3 IN MARCH VS 64.2 IN FEBRUARY "
Matthew Graham : "RTRS - CHICAGO PURCHASING MANAGEMENT NEW ORDERS INDEX 63.3 IN MARCH VS 69.2 IN FEBRUARY "
Victor Burek : "another miss"
Matthew Graham : "RTRS - CHICAGO PURCHASING MANAGEMENT INDEX 62.2 IN MARCH (CONSENSUS 63.0) VS 64.0 IN FEBRUARY "
Brayden Alexander : "He said he will be right back, just catching a smoke, plans on being a facemelter"
Matthew Graham : "he was here earlier"
Raul Lopez : "103 today?"
Matthew Graham : "we're not overly-hopeful that Chicago PMI at 9:45 or Consumer Sentiment at 9:55 are the two epic pieces of market data that will finally provide the big picture for market movement this morning. After that, the day is basically over with the exception of Fed Twist buying from 1015-1100am."
Jeff Anderson : "Is the day over after Chicago PMI and Mich Sentiment?"
Jeff Anderson : "Great stuff, MG."
Matthew Graham : "lol, I was waiting for a comment on it... thanks JA. first 'lol" of the morning"
Jeff Anderson : "Agreed on the locking up a few today. But who's not loving the Upside Tasuki Gap. I mean, c'mon!"
John Rodgers : "Correct"
Matt Hodges : "it's a potentially very good day to lock, that's all"
Matt Hodges : "we've enjoyed much in gains over this week. Who knows about EU tapebombs might come out this weekend"
Matthew Graham : "RTRS - US FEB PERSONAL SAVING RATE 3.7 PCT, SMALLEST SINCE AUG 2009, VS JAN 4.3 PCT "
Victor Burek : "new coupon..auction yesterday"
John Rodgers : "Why is the 7 yr getting such a strong bid?"
Victor Burek : "weather related?"
Matthew Graham : "I'm surprised stocks aren't rallying on a +.8 spending figure"
Matthew Graham : "RTRS- US FEB REAL CONSUMER SPENDING +0.5 PCT VS JAN +0.2 PCT (PREV 0.0 PCT) "
Matthew Graham : "RTRS - US FEB CORE PCE PRICE INDEX +0.1 PCT (+0.1310; CONS +0.1 PCT) VS JAN +0.2 PCT (PREV +0.2 PCT) "
Matthew Graham : "RTRS - US FEB PERSONAL INCOME +0.2 PCT (CONS +0.4 PCT) VS JAN +0.2 PCT (PREV +0.3 PCT) "
Victor Burek : "income lower"
Matthew Graham : "RTRS - US FEB PERSONAL SPENDING +0.8 PCT, LARGEST INCREASE SINCE JULY, (CONSENSUS +0.6 PCT) VS JAN +0.4 PCT (PREV +0.2 PCT) "
MBS Market Alerts
