Consumer Sentiment at Lowest Since 1982, MBS Respond well

MBS would be doing very poorly indeed this morning if it were not for the Consumer Sentiment report released by university of Michigan.  The number was 62.6, the weakest in 26 years and yet more evidence for an extremely weak economy with the the worst times possibly still to come.

Unfortunately, there had been heavy selling in MBS overnight to the tune of about 2/3rds of a point!  Ouch!

The consume sentiment figures have done much to help that.  the 5.5% coupon began the morning in the 99-12 territory and has since climbed to 99-23.   

The treasury market and the MBS market are under considerable selling pressure this morning.  Even as I started typing we had fallen to the 99-23 level from closer to 100-00.  This puts us at about a 6/32nds worsening from yesterday, so don't expect much from your rate sheets today.  Treasuries are down similarly.   

With the horrible consumer sentiment data failing to bring MBS positive on the day, it's apparent that the selling pressures are immense.  That's a dangerous time to be floating.

Stay tuned for another update soon.  It looks like it's going to be a wild day.