The Day Ahead: Home Prices, Confidence, and Lots of Fed Speakers

By: Matthew Graham •

Here's this morning's update and video from MBS Live:

MBS and Treasuries Slightly Weaker in Quiet Overnight Session 8:23AM

In the context of recent market movements and recent availability of juicy EU headlines, last night was pretty ho-hum. US Treasuries were content to follow German Bunds for the most part although the latter remain more prone to bigger swings. After hitting 2.015, 10's fought back a bit from 5am to 8am to begin the day at 1.99. MBS are just slightly weaker to start the day, down 2 ticks at 101-25. If that holds up through rate sheet time, we should see some improvements. 

Between economic data and Fed-speak, there's a lot on tap today:

  • 900 AM - Case Shiller Home Prices - On a seasonally-adjusted basis, there's no change expected to the month-over-month 20 city index while the not-seasonally-adjusted numbers are expected to have slowed to 0.1% from 0.2% last month. The year-over-year rate of decline is also expected to have eased to -3.0% vs -3.8% 
  • 1000 AM - Consumer Confidence - previous: 39.8 / forecast: 44.0 
  • 1000 AM - FHFA Monthly Home Prices

Fed Speakers: 

  • 1130am - Yellen
  • 1215am - Raskin
  • 1230am - Lockhart
  • 0430pm - Williams 
  • 700-800pm - Kocherlakota

Despite the glut of data and Fed-speak, we'd need to see a big miss or beat of expectations (or big surprise from a Fed speaker) in order for our domestic economic situation to wrest the reigns of market movement from European events. Expectations for today's EU summit have quickly lost gravity in favor of the December 9th meeting, so any EU-inspired swings would more likely have to come from "unscheduled events" this morning. Oh Joy.

In the minutes that have transpired since then, MBS and Treasuries are stronger, if anything, with 10's now cracking into the 1.98's and Fannie 3.5's nibbling at 101-27 at times.  S&P futures have fallen from 1204 overnight to 1193 currently.