MBS Live: MBS Morning Market Summary
The overnight session provided the week's best examples of logical cause and effect.  Germany's parliamentary approval of the Cyprus bailout along with positive Spanish debt auction contributed to a risk-on vibe during European hours.  Treasury yields and equities futures rose in tandem.  Domestic accounts seized the opportunity to buy at 8am, reigning in yields ahead of the weaker-than-expected Jobless Claims data.  After opening just under yesterday's lows, MBS put in steady gains in the first two hours, turning positive by 10am's Philly Fed data release and holding ground near those levels after 5 minutes of additional rallying due to the weakness of the report.  There are no additional significant pieces of data today and prices are operating well within the week's established technical framework--waiting for "something."  The positivity brings Treasuries and MBS close to the stronger end of recent ranges, but resistance is still intact for now.  That resistance is characterized not be individual price levels, but "zones" (104-07 - 104-11 in Fannie 3.0s and 1.70 to 1.67 in 10yr yields).
MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
FNMA 3.0
104-07 : +0-02
FNMA 3.5
106-10 : +0-01
FNMA 4.0
106-30 : +0-01
FNMA 4.5
107-22 : +0-01
GNMA 3.0
105-30 : -0-03
GNMA 3.5
108-22 : -0-04
GNMA 4.0
109-18 : -0-03
GNMA 4.5
109-04 : +0-01
FHLMC 3.0
103-26 : +0-01
FHLMC 3.5
106-01 : +0-01
FHLMC 4.0
106-20 : +0-01
FHLMC 4.5
106-31 : +0-01
Pricing as of 11:05 AM EST
Morning Reprice Alerts and Updates
Below is a recap of instant Reprice Alerts and updates issued via email and text alert to MBS Live subscribers this morning.

10:14AM  :  ECON: Philly Fed Weaker Than Expected, Employment Much Lower
- Headline index +1.3 vs +3.0 consensus, +2.0 prev.
- 6-month outlook 19.5 vs 42.5 prev.
- New Orders -1.0 vs +0.5 prev.
- Employment -6.8 vs +2.7 prev, lowest since Nov.
- Market Reaction: moderately positive for bond markets and negative for stocks, but both have held off on any bigger moves for now (possibly starting to bounce)

Manufacturers responding to the Business Outlook Survey reported near steady business activity in April. The indicator for overall activity remained slightly positive this month, but other broad indicators were mixed. Indicators for new orders and employment were weaker this month. The survey's broad indicators of future activity suggest that firms expect continued growth, but optimism waned compared with last month.

The number of firms reporting increased activity this month (22 percent) edged out those reporting decreased activity (21 percent). The demand for manufactured goods remained weak, with the current new orders index declining from 0.5 to -1.0. The shipments index showed continued improvement, however: The index remained positive and edged six points higher, to 9.1, its highest reading in four months. Nearly 28 percent of the firms reported an increase in shipments; 19 percent reported a decrease. Firms reported a notable decrease in inventories this month: The current inventories index fell from zero to -22.2.

Labor market conditions showed continued signs of weakness, with indexes suggesting lower employment overall. The employment index decreased from 2.7 in March to -6.8 this month, its first negative reading in three months. The percentage of firms reporting employment decreases (17 percent) exceeded the percentage reporting increases (10 percent). The workweek index remained negative for the fourth consecutive month.
9:34AM  :  MBS, Treasuries Turn Positive After Data and Stock Open
Overnight trading once again saw Treasuries rally mildly during Asian hours and reverse course during European hours. Volatility was slightly higher this time around as 10's moved up nearly 4bps from trough to peak, a bit more brisk than yesterday's similar move.

But in the common pattern described above, the 3rd ingredient is an 8am (or thereabouts) rally for domestic bond markets. Indeed that has been the case this morning as MBS and Treasuries were already on the move back to better levels well ahead of the Claims data. After Claims, we've held flat to slightly stronger in MBS and unequivovally made moderate gains in Treasuries. All told, not a massive reaction to the first data of the day (and it likely shouldn't be, given its closeness to consensus), but neither was it a negative one.

The next and only other piece of data this morning is the Philly Fed Index at 10am. Consensus is for the headline index to come in at 3.0 vs 2.0 last time. This data series occasionally produces a big miss and equally big reactions. The potential is there, but it can be equally tepid if close to consensus.

Fannie 3.0s just turned positive, up 1 tick on the day at 104-06 and 10yr yields are down a bit more than half a bp from 5pm levels at 1.69. A few larger trades have come in just after the stock market opened with equities edging lower in the first few minutes. S&P's are still just barely positive on the day at 1552.57
8:41AM  :  ECON: Jobless Claims Roughly As Expected
- Claims 352k vs 350k consensus
- 4-week average 361,250 vs 358,500 previously
- Continued Claims 3.068 mln vs 3.075 mln consensus
- Market Reaction: Minimal, but slightly positive

In the week ending April 6, the advance figure for seasonally adjusted initial claims was 346,000, a decrease of 42,000 from the previous week's revised figure of 388,000. The 4-week moving average was 358,000, an increase of 3,000 from the previous week's revised average of 355,000.

The advance seasonally adjusted insured unemployment rate was 2.4 percent for the week ending March 30, unchanged from the prior week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending March 30 was 3,079,000, a decrease of 12,000 from the preceding week's revised level of 3,091,000. The 4-week moving average was 3,079,250, an increase of 5,250 from the preceding week's revised average of 3,074,000.
Live Chat Featured Comments
A recap of the featured comments from the MBS Live Dashboard's Live Chat feature, utilized by hundreds of industry professionals each day.

Steve Chizmadia  :  "Even if still within 6 months Curt/"
Curt Sandfort  :  "I've seen old case #'s get cancelled by FHA"
Robin Baran  :  "You will need to use the old appraisal as it stays with the case number for 6 months"
Robin Baran  :  "Jason, the mi will be determined by the date of the case number so you will get the reduced amount"
Gus Floropoulos  :  "case # yes, appraisal not sure"
Jason York  :  "if I have a new FHA purchase, where a case number and appraisal were ordered for another customer with a different lender, I need to use that same case number if I am within 6 months, and i use the same appraisal, correct?"
Matthew Graham  :  "RTRS- PHILADELPHIA FED EMPLOYMENT INDEX APRIL -6.8 VS MARCH 2.7 "
Matthew Graham  :  "RTRS - PHILADELPHIA FED BUSINESS CONDITIONS APRIL 1.3 (CONSENSUS 3.0) VS MARCH 2.0 "
Victor Burek  :  "more weak data"
Matthew Carver  :  "You have to file articles of dissolution with the Secretary of State of PA. http://www.dos.state.pa.us/portal/server.pt/community/corporation_bureau/12457 "
Eric McDonald  :  "Go to the state site and all LLC paperwork should be on file"
Jeff Weaver  :  "its a USDA and income puts him over limit"
Sung Kim  :  "why would you need to dissolve the LLC? "
Jeff Weaver  :  "so its still active and i need to dissolve it asap"
Jeff Weaver  :  "borrower was sole proprietor and now W-2 but kept llc for part time income"
Matthew Carver  :  "Is it showing as active or inactive on the state Div of Corp website?"
Matt Hodges  :  "is the property in LLC?"
Jeff Weaver  :  "i have a condition to show proof an LLC is dissolved. Anyone ever run into this? Are there any expediant options?"
Matthew Graham  :  "I wouldn't worry too much about it. The consequences would be clear. He has no broad-based support for such notions on the FOMC and a history of being mega crazy hawkish. I don't get the impression that markets take anything he says very seriously"
Alan Craft  :  "http://www.mortgagenewsdaily.com/04172013_housing_forecasts.asp <<<<<<< Hey Lacker"
Matthew Graham  :  "RTRS - LACKER SAYS WOULD STOP BUYING MORTGAGE-BACKED SECURITIES FIRST "
Matthew Graham  :  "RTRS- FED'S LACKER SAYS "POSITIVE TRAJECTORY IN U.S. HOUSING MARKET OUGHT TO MAKE FED RECONSIDER ASSET PURCHASES "
AQ  :  "hikes went into effect starting April 1. Range from 1-5bps"
AQ  :  "FNMA is leveling the playing field on gfees"
john murphy  :  "Secondary Folks: I'm noticing narrower spreads BE v.mandatory. From 60+ bps earlier now 30 bps. What are primary reason for this? Would like some opinions. Is hedging worth the risk of pair-offs in such a volatile market? Ive made some ill-timed bets on rising rates and have been burned in market rallies. at 30 bps is it worth it?"
Matthew Graham  :  "http://tinyurl.com/co2tcs4"
Jason Anker  :  "I'm lokcing a few now so we'll be green shortly"
Matthew Graham  :  "i'll make you a chart, just sec"
Jason Anker  :  "MG refresh my memory 3M cib't claims is considered to be....? in general good level bad level?"
Matthew Graham  :  "minimal revisions too. It's really been leveling off "
Matthew Graham  :  "RTRS- US JOBLESS CLAIMS 4-WK AVG ROSE TO 361,250 APRIL 13 WEEK FROM 358,500 PRIOR WEEK (PREVIOUS 358,000) "
Oliver S. Orlicki  :  "data as expected"
Matthew Graham  :  "RTRS- US JOBLESS CLAIMS ROSE TO 352,000 APRIL 13 WEEK (CONSENSUS 350,000) FROM 348,000 PRIOR WEEK (PREVIOUS 346,000) "
Oliver S. Orlicki  :  "1.70 is a tough nut to crack"
Oliver S. Orlicki  :  "well,we were green earlier"

Read what our user's have to say about MBS Live on LinkedIn.
» Start a two week free trial of MBS Live.