Monday 8/4 ... At A Glance

At A Glance

• CC's down 7 ticks to 100-05 on Income and Outlay report
• Why Down?  Core PCE up .3% versus consensus of .2%. 
  
• Incomes up .1% versus -.2% consensus.  Spending up .6% versus .4% consensus (tax rebates a factor)
  
• Construction Spending will arrive at 7AM.
• Stock futures pointing slightly down
• Technicals
• Several methods show the 100-05 level as a floor of support.  Indeed, after this AM's sharp downtick, the curve has paused (at least for now), right at that level. 
  
• These same techs show potential for a good week, though everyone else's favorite, candlesticks, are pointing to a down day.
  
• LOCK/FLOAT;
• floating for now. we'll let you know if we slip much from this current floor. 
  
• For now, UST's and MBS are "trackin'." 
  
• But as always stay tuned for potential intraday changes
  

• CC's
• Current Coupons.  Basically it's whichever coupon in the FNMA 30 yr fixed stack that happens to be the most liquid or closest to par.
• Choppy
• refers the the prices of MBS vacillating wildly (big differences between highs and lows and lots of back and forth in between). 
  
• MBS -                 
  
• Mortgage Backed Security
• MDPC-
  
• Mid Day Price Change (plus means for the better, minus for the worse)
• DOW or DJIA -    
  
• Dow Jones Industrial Average
• Ticks-                   
  
• 1/32nds of bond pricing.  8 ticks=8/32nds=.25 in cost (YSP or discount)
• DoD, YoY, MoM-  
  
• Day over day, year over year, month over month, etc..
• O/N-                   
  
• Overnight
• Coupon-               
  
• The "interest rate' of the MBS
• 6.0's, 5.5's           
  
• always means FNMA 30yr Fixed MBS with a coupon of that number.  6.0's = 6.0% coupon rate MBS
• PCE-                    
  
• Personal Consumption Expenditures, a component of the Income and Outlay report and one of the Fed's preferred inflation indicators
  
• UST-                    
  
• United States Treasury Bonds.  5UST = 5 year, 10UST = 10 year, etc.. 
• NAPM (PMI)         
  
• National association of purchasing management (Purchasing Manager's Index)
• ISM (MFG)           
  
• Institute for Supply Management (mfg: manufacturing)
• Wide/Gap/Gappy  
  
• refers to the wideness or gap between treasury yields and MBS yields.
• "Going Out"          
  
• 4:45PM EST.  Official Close is 3pm EST 
• FI                        
  
• "fixed income."  For our purposes, will simply refer to treasuries and MBS 
• NFP                    
  
• Non-Farm Payrolls.  Key part of employment report.  Most meaningful gauge of labor market
• ADP                    
  
• ADP private payrolls, some feel a precursor to NFP, but historically quasi-accurate at best.
• GSE
• Government Sponsored Enterprise.  Refers to Fannie Mae and Freddie Mac
• PPI
• Producer Price Index. A key inflation indicator. 
• CPI
• Consumer Price Index.  An even more key inflation indicator.