This AM So Far
- Fed Chairman Ben Bernanke to be Reappointed. Statement from President Obama expected at 9AM. Wall Street likes this move as it keeps those familiar with the crisis in place...not to mention Bernanke has provided remarkable support to the marketplace during this crisis. MND cheers Bernanke...
- TSY Futures traded higher overnight but are losing steam as stock futures indicate an open to the upside(losing steam)
Recap of Yesterday's Session
- Dearth of data didnt stop TSY rally ahead of auctions. Short covering pre-Fed OMO TSY purchases followed by weakness in stocks leads TSY prices higher/yields lower.
- Mortgage bankers sold between $1.5 and $2.0 billion yesterday...supply absorbed by usual suspect: the Federal Reserve. Asia buying "explicitly guaranteed" GN paper buyer
- Current Coupon hovering near 4.5..currently 4.49%. Negative Convexity of 4.5 keeps prices near 100-00 as yields fall with every tick higher in price
- "Up in Coupon" MBS buyers took profits
- S&P looking "toppy" as DOJI candlestick forms outside Bollinger Band. Sell signal from stochastics will imply possible trend reversal in stocks. TSYs, MBS, and mortgage rates would benefit from lower volatility in rates.
In The Time It Takes To Type
- "Rate sheet influential" MBS prices 6/32 lower...playing follow the leader with benchmark big brothers.
- Waning summer session keeps markets choppy.
- May seem like TSYs are wondering aimlessly...we are watching stock lever, moving averages, and key retracement levels for guidance
- As stated above stocks are showing weakness...good timing as market participants will be returning from vacation in near future
MBS Market Alerts
