By coming in at 190k vs a median forecast of 201k, today's ADP Employment data essentially abstained from strong comment on Friday's NFP. Because of the strategic importance of Friday's NFP, today's ADP therefore abstains from strong comment on Fed rate hike prospects as well. The result is a market that continues to grind into an ever-narrower consolidation. This is a classic technical 'triangle' that tends to result in greater momentum behind the the breakout.
Both MBS and Treasuries began the day near yesterday's best levels, and both promptly moved to yesterday's weakest levels after the ADP data. Factory Orders were also much weaker than expected at 10am, especially when the transportation sector was excluded (-0.6 vs +0.6 last month). Even then, bonds continued to push the weaker limits of the recent range.
Judging by the market's reaction to the weaker data, we're left to assume that the burden of proof lies on side of the argument AGAINST raising rates. In other words, it looks like markets are taking anything close to consensus as "good enough" to keep the Fed in a position to hike in 2 weeks.
MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom.
Real time pricing is available via MBS Live.
| MBS | FNMA 3.0 100-18 : -0-06 | FNMA 3.5 103-23 : -0-05 | FNMA 4.0 106-10 : -0-03 |
| Treasuries | 2 YR 0.7200 : +0.0080 | 10 YR 2.1860 : +0.0260 | 30 YR 2.9520 : +0.0330 |
| Pricing as of 9/2/15 11:21AMEST |
Morning Reprice Alerts and Updates
8:50AM : ALERT ISSUED: Bond Markets Unhappy About Something (What it is ain't exactly clear)
Live Chat Featured Comments
B C : "its been a few years now since "a lot" of UWers are scared to manually UW"
B C : "if you cant do inhouse just need to find someone that takes manuals\"
Victor Burek : "the lates are a huge issue"
Matthew Graham : ""If the Chapter 13 bankruptcy has not been discharged
for a minimum period of two years, the loan must be downgraded to a Refer
and evaluated by a Direct Endorsement (DE) underwriter.""
Jason Lowe : "Yeh...they were going to approve it DURING the BK because I have the letter from the judge ok'ing it. My concern is what happens after the BK is officially over....hope that makes sense. "
Christopher Stevens : "HUD.gov 4155.1 4.C.2.h
Chapter 13
Bankruptcy"
Christopher Stevens : "FHA will consider approving a borrower who is still paying on a Chapter 13 Bankruptcy if those payments have been satisfactorily made and verified for a period of one year. The court trustee's written approval will also be needed in order to proceed with the loan. The borrower will have to give a full explanation of the bankruptcy with the loan application and must also have re-established good credit, qualify financially and have good job stability."
Jason Lowe : "FHA question.....how long out of a Chapter 13 on an FHA loan? Client makes last payment on November 2nd. Assume it will take about 60 days for the official discharge date. Trying to make sure he can do that."
Matthew Graham : "I read it as "it's harder for the Fed to justify," (not that I necessarily agree)"
Justin Bayle : "Think they woke up one day and said "let's take it easy and QE today?""
Justin Bayle : "What does that mean? They've done a lot hard things over the years"
Matthew Graham : "RTRS- MOODY'S ANALYTICS MARK ZANDI SAYS IF NONFARM PAYROLLS IS BELOW 200,000 IT GETS HARD FOR THE FED TO RAISE RATES - CNBC"
Matthew Graham : "RTRS- MOODY'S ANALYTICS MARK ZANDI SAYS AUGUST NONFARM PAYROLLS FROM LABOR DEPT COULD BE IN THE 160,000 AREA"
Matthew Graham : "RTRS- MOODY'S ANALYTICS MARK ZANDI SAYS AUGUST LABOR DEPT NUMBER LIKELY TO COME IN ON WEAK SIDE DUE TO SEASONAL ADJUSTMENT ISSUES"
Matthew Graham : "RTRS- REUTERS CONSENSUS FORECAST FOR ADP PAYROLL CHANGE FOR AUG WAS FOR INCREASE OF 201,000 JOBS"
Matthew Graham : "RTRS- ADP NATIONAL EMPLOYMENT REPORT SHOWS U.S. EMPLOYMENT INCREASED BY 190,000 PRIVATE SECTOR JOBS IN AUGUST"
Alan Craft : "Guidelines do not matter if "your underwriter" has their own opinion"
MBS Market Alerts
