MBS Live: MBS Morning Market Summary
It's a "tale of two pivots" so far today for MBS and Treasuries alike. 10's have bounced incessantly in the mid 1.54's, unwilling to go any lower. Those levels go back to last Thursday and Friday, where Thursday's earlier morning rally bounced at similar levels and Friday's bond-friendly European hours used 1.54's as a ceiling before NFP. The high end of the range in 10yr yields today has been equally supportive so far though, and is just under 1.58.
MBS are in a similar position, having been well-supported by 104-24 on the low side (Fannie 3.5's) and well-resisted by 104-29 on the high side. With data and G7 conference calls out of the way, there's not much to do, say, or think about trading levels until one of these pivot points is convincingly broken.
MBS are in a similar position, having been well-supported by 104-24 on the low side (Fannie 3.5's) and well-resisted by 104-29 on the high side. With data and G7 conference calls out of the way, there's not much to do, say, or think about trading levels until one of these pivot points is convincingly broken.
MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
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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.
10:12AM :
ECON: ISM Non-Manufacturing Stops 3 Month Slide
After the worst 3 months of consecutive declines since 2008, The ISM Non-Manufacturing survey Purchasing Manager's Index rose microscopically from 53.5 to 53.7 and Business Activity rose from 54.6 to 55.6.
Despite the marginal gains, equities rose on the release, taking solace, perhaps, from the fact that today's report doesn't pile-on to the recently growing supply of negative economic data and consensus misses.
As has been the case for most of the morning, Treasuries are fairly well correlated with equities and the 10yr is consequently rising on the news, but has recently been more resistant to morning gains in stocks. MBS have only given up a few ticks since 10am.
Elsewhere in the ISM report, it's not all good news as the Employment component fell to 50.8 from last month's 54.2, it's largest monthly drop of the year.
Despite the marginal gains, equities rose on the release, taking solace, perhaps, from the fact that today's report doesn't pile-on to the recently growing supply of negative economic data and consensus misses.
As has been the case for most of the morning, Treasuries are fairly well correlated with equities and the 10yr is consequently rising on the news, but has recently been more resistant to morning gains in stocks. MBS have only given up a few ticks since 10am.
Elsewhere in the ISM report, it's not all good news as the Employment component fell to 50.8 from last month's 54.2, it's largest monthly drop of the year.
9:21AM :
ALERT ISSUED:
Bond Markets Ratchet Another Notch Weaker Overnight
Treasuries continued to weaken in the overnight session as 10yr yields promptly rose above their 1.532 pivot point in asian hours, but rallying back into the 7am hour. The scary/disappointing part about the bounce back was the resistance level that marked a floor for improving yields. It was precisely on Friday's pre-NFP highs and post-NFP bounce at 1.51%. 10's then spent little time moving up to the next pivot point higher in yield at 1.573. That marks the high for this morning so far, and 10's have recovered fairly well, currently back down to 1.5474
All of the above had desultory effect on MBS, but the bounce back has been well received with 3.5's struggling to break even now and 3.0's--which took less than 20% of yesterday's share of hedging--down a few ticks still at 102-16
Nothing momentous has come out of the G7 talks this morning but there is, perhaps, a slightly more optimistic tone overall. One example from even before the G7 conference call was an overnight wire from OECD's Gurria saying there's no reason Spain should be paying over 7% interest when "it's doing all the right things." Germany continued to push Spain to accept aid.
No data on tap until 10am with ISM non-manufacturing, followed by Fed "Twist" buying at 10:15-11:00am.
All of the above had desultory effect on MBS, but the bounce back has been well received with 3.5's struggling to break even now and 3.0's--which took less than 20% of yesterday's share of hedging--down a few ticks still at 102-16
Nothing momentous has come out of the G7 talks this morning but there is, perhaps, a slightly more optimistic tone overall. One example from even before the G7 conference call was an overnight wire from OECD's Gurria saying there's no reason Spain should be paying over 7% interest when "it's doing all the right things." Germany continued to push Spain to accept aid.
No data on tap until 10am with ISM non-manufacturing, followed by Fed "Twist" buying at 10:15-11:00am.
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.
Dennis Lykins : "yup. check case query for endorsement date prior to 05/31/2009"
Jeff Statz : "right. can also cancel old case #'s if needed. reason specified is something like "lower MIP""
Charles Beasley : "Wow thats awsome, Thanks, all I need to do is wait to order the FHA case number until 6/11 correct?"
Jeff Statz : "Everyone, 6/11/12 Streamline details is on page 3, here: http://portal.hud.gov/hudportal/documents/huddoc?id=12-04ml.pdf"
Jeff Statz : "bpmi 0.55 factor. ufmip, instead of 1.75% is 0.01%."
Jeff Statz : "and not changing _all_ streamlines. just the fha loans endorsed by the cutoff date."
Jeff Statz : "0.01 ufmip"
Charles Beasley : "Are there any other changes on 6/11 to the streamline other than the bpmi going down to .55? "
Mike Drews : "we gonna take another shot at the "unfriendly resistance" line again here?"
Matthew Graham : "that was a prominent high, so you have good, high volume activity on both sides of the pivot."
Matthew Graham : "5/17 high at 103-23+ as well."
Matthew Graham : "looking that way so far today"
Andy Pada : "MG, what is the next pivot on 3.5? 104.24?"
Matthew Graham : "(Reuters Instant Views) - PETER BOOCKVAR, EQUITY STRATEGIST, MILLER TABAK & CO, NEW YORK
"The (equities) market is very fearful of the economic data. Even if it was in line with expectations there’s a sigh of relief from many that it wasn’t worse.
“Europe’s obviously a concern, but we’ve been selling off for weeks on that. A slightly better than expected services number, which makes the majority of the U.S. economy, is a sigh of relief in the face of a lot of bearishness.""
Matthew Graham : "someone call the stock market... tell them to look at the employment component!"
Matthew Graham : "RTRS- ISM NON-MANUFACTURING NEW ORDERS INDEX 55.5 IN MAY VS 53.5 IN APRIL "
Matthew Graham : "RTRS - ISM NON-MANUFACTURING EMPLOYMENT INDEX 50.8 IN MAY VS 54.2 IN APRIL "
Matthew Graham : "RTRS - ISM NON-MANUFACTURING BUSINESS ACTIVITY INDEX 55.6 IN MAY (CONSENSUS 54.7) VS 54.6 IN APRIL "
Matthew Graham : "RTRS- ISM REPORT ON U.S. NON-MANUFACTURING SECTOR SHOWS PMI AT 53.7 IN MAY (CONSENSUS 53.5) VS 53.5 IN APRIL"
Paul Carlin : "I had one that was done April 13, endorse June 9. Another closed on May 2, endorsed May the 21st. "
Paul Carlin : "FHA and the original lender could take up to 60 days to get endorsement"
Victor Burek : "must be endorsed by that date"
Victor Burek : "5/31/2009"
Dan Clifton : "sorry 6/1/2009"
Dan Clifton : "what is the date for FHA streamlines to have the lower MI? 6/1/99?"
Adam Dahill : "Tell me about it Paul. I do 99% of my business in the 5 boroughs. Pain in the butt but my average loan size is approx 600k As biggie said Mo Money Mo Problems. "
Paul Carlin : "NY is a pain, I do not send any marketing material to the that state. To many headaches for an out of state person to deal with."
Adam Dahill : "Coop purchases also take 90 days sometimes since you need to wait for board interviews. There are many reasons why one can't lock at application or submission"
Adam Dahill : "Locking is great and all but when some lenders take 30 days to approve files and you have CEMAs as well it makes things difficult"
Christopher Stevens : "my answer was you should have read my email Friday that said rates are as low as they have ever been and locking at this point is never going to be wrong."
Christopher Stevens : "speaking of comedic gold MG I received this call from an LO last night..."I have a $410,000 closing Monday should I have locked Friday?""
Christopher Stevens : "wow is right"
Matthew Graham : "wow, BIG flow in TSY futures just now"
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