MBS Live: MBS Morning Market Summary
This morning's slowness was mostly to-be-expected. There's nothing on the calendar in terms of economic data until the afternoon and the report in question (monthly Treasury Budget) isn't typically a market mover. That's left markets to their own devices so far this morning where light volume has allowed tradeflow-based cues to have a visible impact on trading levels. In other words, with nothing else to watch, traders are watching other trades and those trades comprise a larger portion of overall volume than they otherwise would on a busy day, so they're moving markets, even if only slightly. This is going in our favor so far with MBS up around a quarter of a point in both Fannie 3.5s and 4.0s after beginning the day in flat-to-weaker territory. That was a factor of the overnight session which was mildly negative for US Treasuries, but once domestic accounts started firing on all cylinders that slight weakness became slight strength, bringing 10yr yields to their lows of the month.
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.
9:07AM :
Bond Markets Turn Quickly Positive as Domestic Trading Picks up
Electronic volume had already been picking up before the 8:20am CBOT open (Treasuries Futures) , but we've seen a mini (VERY mini) snowball since then, taking MBS and Treasuries into positive territory. Zooming out by more than a few days shows this move as a modest continuation of the almost flat Treasury rally that began on August 6th. Participation is light enough that it only took a modest amount of buying to get the snowball rolling.
Before that Treasuries began the overnight session flat during Asian hours and came under a small amount of pressure during European hours as yields rose from 2.58 to 2.60 in 10yr Treasuries. The bounce back in the domestic session finds them at 2.561 currently with the snowball looking to have lost some steam after hitting 2.555.
MBS opened flat to Friday's levels in Fannie 3.5s, which are currently up 6 ticks at 101-04. Fannie 4.0s were 1-2 ticks weaker in their first few trades, but are now 2 ticks up on the day at 104-02. They briefly hit 104-07 during the mini-snowball and have yet to come into any steady liquidity thus far.
There are no significant market movers on tap for today, though the Federal Budget (monthly update) is released at 2pm.
Before that Treasuries began the overnight session flat during Asian hours and came under a small amount of pressure during European hours as yields rose from 2.58 to 2.60 in 10yr Treasuries. The bounce back in the domestic session finds them at 2.561 currently with the snowball looking to have lost some steam after hitting 2.555.
MBS opened flat to Friday's levels in Fannie 3.5s, which are currently up 6 ticks at 101-04. Fannie 4.0s were 1-2 ticks weaker in their first few trades, but are now 2 ticks up on the day at 104-02. They briefly hit 104-07 during the mini-snowball and have yet to come into any steady liquidity thus far.
There are no significant market movers on tap for today, though the Federal Budget (monthly update) is released at 2pm.
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.
MMNJ : "yes Ross"
Billy Persohn : "@Ross, yes you can give a broker credit to cover the rest."
Ross Miller : "Freddie Open Access question: The new loan amount is limited to 4% or $5,000 to wards closing costs and prepaids. Can I provide a broker credit to cover the rest?"
Matthew Graham : "If 10's happened to be at 2.46 this AM instead of 2.56 and we were trading in response to one of the week's bigger pieces of data, and volume was high, I'd be all over the importance of 104-10."
Matthew Graham : "From a purely technical standpoint, yes, but I wouldn't be discouraged or encouraged about any technical developments in MBS right now as they're all pretty much out the window if data suggests an opposite conclusion."
Hugh W. Page : "MG seems it's important that we break this ceiling right here. Another failure to break thru this level would not be encouraging. We've tested it and failed a few times since mid June. Is that right?"
Ted Rood : "Agreed, just "big" range for a short period compared with last week's snoozer."
Matthew Graham : "Still pretty sedate in wider view. http://screencast.com/t/jDALz2lSeS"
Ted Rood : "So much for sedate MBS trading."
John Tassios : "What that article highlites is that over in southern Europe, the goverment directly or indirectly accounts for 50%-60% of economic output due to gov run utilities, education, health care, religion, retirement, etc. Goverment run agencies very inefficient, so when goverments go broke, they reduce employment and cut services and thus you have big unemployments like you see in southern Europe. There is no middle class and very little private sector invesment to buffer downturns like this. "
John Tassios : "Ted good article, you can duplicate the exact same scenario in Greece too, I hear this from my relatives over there"
John Tassios : "looks like light volume TSY bids still holding for now"
JRS : "Good article. What are things the news does not want the American people to know about, Alex, for $2000 please. "
Ted Rood : "Think Europe is all better? Check this out: http://www.washingtonpost.com/world/spanish-struggle-amid-unemployment-crisis/2013/08/11/4e17466e-da63-11e2-b418-9dfa095e125d_story.html"
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