Did anyone happen to catch Saturday Night Live this weekend?
Alan, the lovable moron from "The Hangover" was the host. I suppose I should share his real name too: Zach Galifianakis. I usually watch SNL on Hulu whenever I have time...but this weekend I happened to be in front of the boob tube to catch it live. I have to say, that entire cast is fully devoted to their careers in comedy. If you missed it or just need a good laugh again...take a few minutes of your day and watch some of the clips, especially the "Kissing Family" skit.
My ribs still hurt from laughing. Seriously.
Trading in the rates market today has been slower than Allen Iverson's exit from the NBA..but not as painful to watch. 361,592 10 yr contracts have swapped hands in the rates futures market, that is well below average for this time of day. Yawn. Price action has been fairly muted and mostly sideways since yields pushed higher at the data-less open.
The 3.625% coupon bearing 10 year Treasury note is currently -0-06 at 99-10 yielding 3.708%. If you recall, 3.71% is exactly in the middle of the 3.57 to 3.85 10 year note range. BANG BANG! (not your head on the desk)
The story isn't much different in the TBA MBS market either. Trading flows are few and far between with most of the focus on forward delivery months and the roll. Let me explain. The MBS Ninja and I were talking a few minutes ago, we usually share secondary market current coupon scorecards, discuss trade flows, and compare implied volatility marks... however today's convo was mostly about how poorly the N.Y. Rangers' neutral zone play is and the only major bright spot was their goaltender--- who has the ability to stand on his head. All that tells you is we didn't feel like it was necessary to waste any time talking about the electronic MBS marketplace at the moment. Its been a SLOW day! In fact his last statement before getting off the phone was "I gotta go...Yanks/Phils game is on one of our TVs". HAHA...so you're saying your attention is not focused on your screens Mr.Ninja? Yeh......
I usually try and embed some sort of positive tone to my content so here goes...
While the aforementioned UST10YR note is trading underwater, "rate sheet influential" mortgage-backeds are treading water at Friday's "going out" marks. THE FN 4.0 and FN 4.5 are flat on the day! Wooohooo??? No Woohoo? I can already sense the apathy in your response as I type this...rate sheet rebate was reduced today, that pretty much offsets the minimal celebration one might throw for flat MBS prices. Interestingly enough the FN 4.5 is bouncing around near its mid-range pivot point.
The dollar has regained lost ground against the Euro...that seems to be a consistent theme lately doesn't. Oh and guess what, since the dollar has recovered from early session weakness,stocks have lost a small portion of early session progress as oil prices have fallen. The S&P is +0.08% at 1139 while the Dow is 2pts lower at 10,564. YAWN!
Other than rates traders preparing (early morning sell off) for $40 billion 3s tomorrow, $21 billion 10s on Wednesday, and $13 billion 30s on Thursday....there has been a wave of new corporate debt issuance today. Technical explanation aside for the short term reversal of swap spread widening, essentially what this tells you is those in need of debt financing are trying to lock in their borrowing costs before rates rise. Does that provide a hint about where the market thinks benchmarks yields are heading??? UP!...they are locking for the same reason you would be locking in your pipeline.
Not sure what else to say after that....I think it provides a decent short term indication of where rates are headed though.
I published a Community Commentary titled: The Ultimate Solution for the Appraisal Industry. This post will undoubtedly get a lot of attention. If you have not read it yet, check it out and share your opinion.