MBS MID-DAY: 3/2/2012
By:
Matthew Graham
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MBS Live: MBS MID-DAY
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Morning Market Updates
A recap of MBS Market Updates provided by MND Analysts and streamed live to the MBS Live Dashboard.
9:26AM :
ALERT:
MBS and Treasuries Slightly Stronger Overnight. Quiet Session in Progress
Data, headlines, volatility, volume... All very quiet in the overnight session and into the first hour of the domestic session. MBS and Treasuries both improved on the "bounce back" gains seen yesterday afternoon, but are by no means guaranteed to continue improving today.
The frustrating thing about today's trading is that if volume stays on the current course, the actual fluctuations we see in price and yield won't necessarily the best indications of true market sentiment. As we said yesterday, we were left with the impression that the week was effectively over after yesterday morning's trade barring some significant and unexpected piece of news, most likely of the European variety.
Shifting to metaphor mode, bond markets have run their race for the week and will now do their best not to crash on the way back to the pits. For MBS, that means an attempt to hold onto 103-10 technical support today as a better-case-scenario, but we wouldn't be overly disheartened to end up slightly lower (especially considering yesterday's support level 103-00).
Technicals in Treasuries are a bit less clearly defined. Worst-case, we'd like to see 2.045 hold as a supportive ceiling, but would prefer a break below Thursday's highs at 1.998. Unfortunately, the first test of that pivot point saw yields bounce higher to their current levels around 2.01. Fannie 3.5 MBS are currently up 4 ticks on the day at 103-11.
The frustrating thing about today's trading is that if volume stays on the current course, the actual fluctuations we see in price and yield won't necessarily the best indications of true market sentiment. As we said yesterday, we were left with the impression that the week was effectively over after yesterday morning's trade barring some significant and unexpected piece of news, most likely of the European variety.
Shifting to metaphor mode, bond markets have run their race for the week and will now do their best not to crash on the way back to the pits. For MBS, that means an attempt to hold onto 103-10 technical support today as a better-case-scenario, but we wouldn't be overly disheartened to end up slightly lower (especially considering yesterday's support level 103-00).
Technicals in Treasuries are a bit less clearly defined. Worst-case, we'd like to see 2.045 hold as a supportive ceiling, but would prefer a break below Thursday's highs at 1.998. Unfortunately, the first test of that pivot point saw yields bounce higher to their current levels around 2.01. Fannie 3.5 MBS are currently up 4 ticks on the day at 103-11.
Featured Market Discussion
A recap of the featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham : "For anyone curious about the 2.014 discussion earlier or anyone who appreciates interesting technical eventualities, here's the post that explains more, particularly the last 3 paragraphs, and 2 charts: http://www.mortgagenewsdaily.com/mortgage_rates/blog/249615.aspx"
Brent Borcherding : "& GMAC to GMAC"
Matt Hodges : "WF to WF"
Dan Clifton : "Anyone here know a lending doing VA IRRRLs with no appraisal and no AVM?"
Matthew Graham : "MBS Com post almost done"
Mike Drews : "Ok ok MG...are you going to tell us? about 2.014"
Brent Borcherding : "I'd guess a chance close to zero."
Victor Burek : "i'd say no"
Brandon Stewart : "Moring all! Is there any chance fannie or freddie will push back the 06/09 date?"
Daniel Kramer : "i just did that with two borrowers. they only had net savings of $120 a month, but in in 5years, hpefulyy they wil be under 80% and then they drop the $300-$400 a month in PMI. "
Daniel Kramer : "Craig, another way to look at the savings is that it is not a quick money savor for the borrower, BUT in 5 years, when hopefully their PMI comes off, thjey will see a BIG drop in monthly payments, and realize the savings for years to come. Also, chances are if they are in a FHA loan, their income will qualify them to take larger tax deductions from the MI too"
Craig LaBruno : "If FHA makes the change to MI on streamline's the flood gates were open. I'm sick of getting calls from clients that are currently at 5.0% and at 3.75% I can only save them a few dollars a month."
Matthew Graham : "2.014 is pretty interesting today. I'm in the process of explaining why. extra credit if you can guess"
Brayden Alexander : "good call MGD"
Mike Drews : "hopefully that 4th bounce off of 2.0139 was the charm to send us under 2.00 again"
Ira Selwin : "Hoping to have a mortgagee letter next week"
Matthew Graham : "letter delayed for a week"
John McClellan : "anyone heard any news on the FHA streamline MI changes?"
Joe Ridings : "GM its good to see green"