MBS MID-DAY: 1/6/2011
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MBSonMND: MBS MID-DAY
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| Pricing as of 11:05 AM EST | ||||||||||||||
Market Updates
10:53AM :
Staging A Second Run At Resistance Following Recently High Yields
10yr yields are once again knocking on the door at 3.4287, remember they need to make it past 3.42 to confirm!
10:25AM :
3.46 Support Holds. Range Being Established
After 3.46 held up as support in 10's, note that yields moved back down exactly to the 3.4287 resistance. Sadly, we've already bounced there and are closer to 3.44 at the moment, so it's just another grind against the prevailing resistance of the morning. It's possible that today could be quiet enough to have seen the extremes of the range today, but failing that, just be aware, either 3.46 or 3.42 will mark the breakout of that range.
9:41AM :
ALERT:
Bonds Weaken At Their Quickest Pace Of The Day
After 10yr yields failed their 2nd test of 3.4287, the rubber band snapped back and yields subsequently shot uncannily to previous 3.46 support and have since moderated back down toward 3.45. MBS 4.5's sold down to 101-28 in concert with this. Outside chances of knee-jerk reprices for the worse only from lenders who were out early with pricing.
9:23AM :
First Line Of Bullish Resistance Broken Again, But Confirmation Eludes
Once again, we are dealing with 2 clearly delineated horizontal levels in 10yr notes providing resistance to further gains: 3.4287 and 3.420 even. Yields have bounced on the former too many time to count this morning and made it through twice, most recently at 9:14am. But a shift to lower yields won't be confirmed unless 3.420 subsequently breaks, and once again, yields have bounced and returned back to the 3.43's. So far, the market is saying it "needs more" in order to be more supportive of sub 3.42 yields.
9:01AM :
"No Dice" Thus Far On A Return To Yesterday AM's Range
After bouncing twice on 3.4289, 10yr notes are languishing sideways in the 3.43 area. So we're left with a morning that is not quite as bullish as it might be, but well off the 3.48 "going out" levels. 4.5 MBS are fighting for 102-00.
8:40AM :
Benchmark 10's Re-Enter Yesterdays Support Range Following Jobless Claims
With Jobless Claims slightly weaker than expected, and coming on the heels of a moderate show of support from real money overnight, bonds are firming up inch by inch and have now crept back to the 3.4289 Support level that held so nicely through 11am yesterday. Approaching this from the other side now makes it RESISTANCE, so don't expect a straight shot through.
8:27AM :
US JOBLESS CLAIMS 4-WK AVG LOWEST SINCE JULY 26, 2008
Source: Reuters
8:27AM :
US INSURED UNEMPLOYMENT RATE UNCHANGED AT 3.3 PCT DEC 25 WEEK
Source: Reuters
8:27AM :
US CONTINUED CLAIMS FALL TO 4.103 MLN (CON. 4.095 MLN) DEC 25 WEEK FROM 4.150 MLN PRIOR WEEK (PREV 4.128 MLN)
Source: Reuters
8:27AM :
US JOBLESS CLAIMS 4-WK AVG FALL TO 410,7500 JAN 1 WEEK FROM 414,250 PRIOR WEEK (PREVIOUS 414,000)
Source: Reuters
8:26AM :
ALERT:
US JOBLESS CLAIMS RISE TO 409,000 JAN 1 WEEK (CONSENSUS 400,000) FROM 391,000 PRIOR WEEK (PREVIOUS 388,000)
Source: Reuters
6:33AM :
New MBS Commentary Post
Featured Market Discussion
Andy Pada : "Let me see here, Fannie Mae is increasing LLPAs for homeowners but are settling for pennies on the dollar with BoA and other large lenders for repurchase requests."
Victor Burek : "just got an email from my corporate.. they say FNMA is increasing LLPA's... anyone else hear or see this?"
Scott Valins : "BB, I like this commentor on the zero hedge post: More than half of retailers missed holiday expectations. November had a low read 9.8, this should have been high if only for holiday jobs.
How in 4 weeks does this number explode during a time when companies layoff at year end?
Help me out here"
Michael Owens : "most of the ADP hires have already been let go because shoping season is over. "
Brett Boyke : "expectations were raised yesterday, setting up the perfect I told you so scenario - ADP was correct and it's rally time, or if NFP comes in light they attribute the miss to higher expectations based on ADP being an outlier"
Oliver S. Orlicki : "450K? Rates would be 6% by the end of tomorrow"
Brett Boyke : "Just read that Barclay's model is predicting 450K+ tomorrow, with a 95% probability based on their model "
John Rodgers : "yes and 100% VA loans. We're signing them up."
Joe Ridings : "Jill, Vic, flagstar doing FHA to 620 again? did i miss a memo?"
Victor Burek : "flagstar about .125 better than yesterdays last sheet"
Adam Quinones : "We've been seeing much seasonal distortion in the data lately. This forces the street to approach each report from a smoothed out approach, meaning economists and traders are taking each report in context of the recent trend and discounting any outliers as heavily influenced by statistical adjustments. The trend is pretty clear in jobless claims though, they're improving. Only time will tell but at least we're heading in the right direction. In the mean time, we are likely to see counterintuitiv"
Matthew Graham : "just as expected for the week"
Matthew Graham : "historically getting back to normal"
Matthew Graham : "relatively huge and accelerating"
Jill Statz : "Matt...what has volume been like this week so far?"
Matthew Graham : "we should see 4.5's tick up to 101-30 if 10's stay here"
Victor Burek : "The advance number of actual initial claims under state programs, unadjusted, totaled 577,279 in the week ending Jan. 1, an increase of 52,038 from the previous week. There were 645,446 initial claims in the comparable week in 2010.
"
Adam Quinones : "bond vigilantes!"
John Rodgers : "What about the 5T the Gov has accrued in debt over the last 18 mo. "
Matthew Graham : "The Fed minutes and policy announcements, and various appearances by Ben are by far and away THE BEST ongoing commentary on the state of the economy"
Matthew Graham : "I look at it this way: yesterday's losses seem IN MY OPINION to have backed in about 3/4's of the damage that would be caused by an NFP that was directly correlative with ADP"
Matthew Graham : "plus, we saw the same sort of "call to action" real money buying from overseas accounts overnight that was stimulated last time yields went this high"