MBS RECAP: 9/20/2011
By:
Matthew Graham
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MBSonMND: MBS RECAP
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Afternoon Market Updates
A recap of MBS Market Updates provided by MND Analysts and streamed live to the MBSonMND Dashboard
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3:54PM :
The Big Day Finally Arrives Tomorrow. FOMC In Focus
Since the glut of today came and went last Thursday morning, the general vibe in markets has been that all are on hold until tomorrow's FOMC announcement.
Stocks seem poised to either break some long term resistance or to be rejected and fall appreciably lower.
MBS continue to be stymied by the "Concrete Ceilings." And Treasuries seem to have already priced in Operation Twist. So the default expectation is that the Fed will mention something about selling shorter term holdings and using that money to buy longer dated Treasuries such as 7s, 10s, and according to some speculation, all the way up to 30's.
Are stocks hoping for an indication of QE3? Only the announcement itself will resolve these curiosities, but fore sure it seems that volume and volatility will be in heavy supply after the announcement. That hits at 215pm Eastern time tomorrow and the only other peice of scheduled data is Existing Home Sales at 10am which is expected to be uneventful.
That's basically "it" for the week as well, considering the only other scheduled data are weekly jobless claims on Thursday morning, some 3rd tier releases later that day and some Fed Speak on Friday.
For a detailed look at all the economic events of the week, see the following link:
Stocks seem poised to either break some long term resistance or to be rejected and fall appreciably lower.
MBS continue to be stymied by the "Concrete Ceilings." And Treasuries seem to have already priced in Operation Twist. So the default expectation is that the Fed will mention something about selling shorter term holdings and using that money to buy longer dated Treasuries such as 7s, 10s, and according to some speculation, all the way up to 30's.
Are stocks hoping for an indication of QE3? Only the announcement itself will resolve these curiosities, but fore sure it seems that volume and volatility will be in heavy supply after the announcement. That hits at 215pm Eastern time tomorrow and the only other peice of scheduled data is Existing Home Sales at 10am which is expected to be uneventful.
That's basically "it" for the week as well, considering the only other scheduled data are weekly jobless claims on Thursday morning, some 3rd tier releases later that day and some Fed Speak on Friday.
For a detailed look at all the economic events of the week, see the following link:
2:38PM :
ALERT:
Stable Enough, High Enough for Reprices for the Better
MBS have slowly but surely clawed back to their best levels from earlier this morning. And while rate sheets didn't take a big pricing hit on earlier weakness and while MBS are still down on the day, we've seen just enough gains and those gains have been stable enough that a few more lenders might do what "the price leader" just did and offer a small token reprice for the better.
Fannie 3.5's are down 3 ticks on the day at 101-20
Fannie 4.0's are down 3 ticks on the day at 104-16
10yr yields are 1 bp lower at 1.9454.
volume is low and as has been the case for several days now, the focus continues to be on tomorrow's FOMC announcement. A new blog post with several longer term charts is linked below. It could add some perspective heading into the potentially market-moving event:
Fannie 3.5's are down 3 ticks on the day at 101-20
Fannie 4.0's are down 3 ticks on the day at 104-16
10yr yields are 1 bp lower at 1.9454.
volume is low and as has been the case for several days now, the focus continues to be on tomorrow's FOMC announcement. A new blog post with several longer term charts is linked below. It could add some perspective heading into the potentially market-moving event:
11:54AM :
How Did The Euro Zone Get Into its Debt Mess?
(Reuters) - The 17 nations sharing the euro are in deep crisis, saddled with massive debts and dangerously weakened by political division over how to find a way out, just as the world economy flirts with another downturn.
Growing alarm that Greece may default or even leave the euro, potentially triggering contagion in the much larger economies of Italy and Spain, puts the debt crisis at the heart of IMF, World Bank and G20 meetings in Washington this week.
Investors and top officials, including U.S. Treasury Secretary Timothy Geithner, are urging European politicians to act and say a failure to do so could provoke a crippling recession and even the break-up of the European Union itself.
Following is a look at how the euro zone got into debt, possible scenarios and how it might end the crisis.
HOW DID EUROPE END UP IN SUCH A MESS?
Featured Market Discussion
A recap of the featured comments from the Live Discussion on the MBSonMND Dashboard
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Matthew Graham : "I don't much like thinking about or planning on what might or might not happen in stock markets, but there's a potentially thought-provoking chart at the end of this one: http://www.mortgagenewsdaily.com/mortgage_rates/blog/229563.aspx"
John Paul Mulchay : "new topic, pf better"
Adam Quinones : "#Greenspan makes #FOMC visit? Has to be for linguistic purposes. #Bernanke must not ignite " irrational exuberance" in oil markets. #FED"
Gus Floropoulos : "I think can kicking may actually become a professional sport in EU"
Adam Quinones : "...another 16 months later and nothing has changed. still can kicking!"
Matthew Graham : "if it's unclear in any way, you can get a clearer sense of what I mean by looking at the 5.5 chart for instance. good example of super thin trading. 4.0's are significantly better, but 3.5's are better still."
Matthew Graham : "3.5 chart looking more liquid than 4's."
Thomas Quann : "I just hope they are wiped completely because with some of our lenders even though the hits for those loans may top 4-5%....they cap them at 1.750 which makes them doable. If they just lessen the hits then i think it will have a minimal impact from what we are used to. What needs to happen is a perfect mortgage history payment translating into no appraisal and no speed bumps on MI certs. That would be most helpful."
Jeff Statz : "will they be only applied to harp or across the board, is the question"
Jeff Statz : "first thing mentioned, loan level pricing adjustments"
Jeff Statz : "On the agency side, investors were buzzing yesterday about a speech given by the Acting Director of the FHFA, Edward Demarco. There is consideration being given to loosening guidelines or reducing fees in conjunction with an expanded HARP offering - but HARP is not a mass refinancing plan, although one can expect an increase in guarantee fees. "Loan level price adjustments, representations and warranties, valuation requirements, and portability of mortgage insurance coverage are among the matter"