MBS OPEN: Another Choppy Morning

By: Matthew Graham

The AM So Far...

  • 10 yr Treasury futures hit 118-18 high overnight.  Gains however lost early this AM after stock futures started to tick higher at 1AM est. TY currently at 118-04
  • Both stock and bond futures sideways since 6am.
  • Choppy MBS price action continues. FN 4.5 hit 100-14 but quickly fell back to 100-10
  • Waiting on housing data and Bernanke

Recap of Previous Session

  • Range trade persists. Marginal gains at best
  • We'll take marginal gains in face of generally negative news for bonds: Philly Fed and LEI positive after a slightly worse than expected Jobless Claims print. Could have been worse for us...
  • Stocks cover shorts then go sideways in tight range. Close higher on day
  • heady technical crossroads successfully tested in Tsy's as yields held below 2 month low for the 2nd day.
  • MBS ostensibly nearing top of range.
  • Yield curve sliiiightly flatter

In The Time It Takes To Type

  • Oil prices near 2009 highs
  • FN 4.5 slightly more improved. Then back to flat. CHOPPITY CHOP CHOP

The Day Ahead

  • Existing Home Sales at 10am
  • Also at 10, Dr. Ben from Jackson Hole.
  • Its a late August Friday...illiquid market activity expected. Dont panic in event of choppiness...

MBS, TSY,LIBOR QUOTES