Good Morning. Happy Tax Day. We have an eventful schedule today so lets get started....
In overseas sessions the Nikkei traded to the downside and the Hang Seng made marginal gains. In Europe, equity indices are being led lower by the financial sector after UBS reported a 1Q loss of $1.76bn and indicated that they would continue to cut their work force in an effort to reduce expenses.
Weakness in overseas equities helped TSY yields move lower through the night, currently TSYs are consolidating their overnight gains and yields are close to yesterday's closing marks. Nonetheless the yield curve is still slightly flatter and MBS/TSY yield spreads are wider a tick or two. There is a great deal of data about to be released....MBS will continue to take its directional guidance from "supply free" TSY markets while earnings season picks up.
The current lack of conviction being exhibited by stock traders combined with government intervention in the fixed income market leads me to believe benchmark buyers (TSYs) will be using a very similar tactical strategy that MBS traders are currently implementing. Range trading with buying occurring on weakness and selling after a period of strength...churn those profits! Take this into consideration when locking/floating...MBS remains somewhat insulated but will continue to be led in one direction or another by the tactical gyrations of the yield curve. (Higher and Wider or Lower and Tighter as been the norm). And dont forget that "day trading" MBS coupons are once again nearing those "too expensive" dollar price levels and MBS investors will be on the look out for a reason to let prices cheapen up a few ticks. Your "rate sheet influential" MBS coupons have a little more room to work with (based on historical highs) before they reach "look for a reason to sell" price levels....
Since 5pm "Going Out" Marks....
FN30_______________________________
FN 4.0 -------->>>> -0-01 to 100-06 from 100-07
FN 4.5 -------->>>> +0-00 to 102-01 from 102-01
FN 5.0 -------->>>> +0-00 to 103-09 from 103-09
FN 5.5 -------->>>> +0-00 to 104-04 from 104-04
FN 6.0 -------->>>> +0-01 to 104-27 from 104-26
GN30________________________________
GN 4.0 -------->>>> -0-02 to 100-12 from 100-14
GN 4.5 -------->>>> +0-01 to 102-10 from 102-09
GN 5.0 -------->>>> -0-01 to 103-28 from 103-29
GN 5.5 -------->>>> +0-00 to 104-13 from 104-13
GN 6.0 -------->>>> +0-00 to 104-25 from 104-25
UST2YR Yield: +0.012 to 0.8709
UST3YR Yield: +0.008 to 1.2365
UST5YR Yield: +0.003 to 1.7318
UST10YR Yield: -0.006 to 2.7845
UST30YR Yield: -0.002 to 3.6572
EFFECTIVE FED FUNDS: +0.03 to 0.16 from 0.13
LIBOR FIXINGS
O/N LIBOR: -0.0050 to 0.2625 from 0.2675
1 MONTH: -0.0044 to 0.4481 from 0.4525
3 MONTH: -0.0094 to 1.1125 from 1.1219
6 MONTH: -0.0131 to 1.6469 from 1.6600
1 YEAR: -0.0169 to 1.9125 from 1.9294
I guess we have a lot of Econ data to talk about this AM....to keep it simple we will focus on what moves the money
MBS Market Alerts
