The Day Ahead: No Econ Data, MIP Grandfathering Rumors, and Greek PSI Delay

Bond markets are modestly improved overnight as 10yr yields returned to their February midpoint near 1.98 after rumors circulated that the deadline for Greece's private sector bond swap would be extended.  This, along with Friday's NFP has been one of our two focal points of the week, and it's potential delay would seem to indicate that participation was shaping up to be too light to avoid activating the CACs (collective action clauses, in other words, force all of Greece's private bondholders to take the predetermined amount of haircut), which would in turn trigger CDSs or at least raise that possibility.

Reuters reported moments later that Greece's Debt agency head Petros Christodoulou said the March 8th deadline was confirmed and few more moments later, a finance ministry official said that Venizelos' comments yesterday "remained valid."  We've not heard from Venizelos' himself, however, and despite these reassurances from Greek officials, the mere suggestion of bumps in Greece's road to perdition has more often than not, proved to be more prophetic than overblown.  So markets can't help but be a bit skeptical.

The skepticism was demonstrated as 10yr yields fell to match yesterday's lows just before the domestic open today.  MBS opened flat, but have trended a few ticks up in the first few minutes, with Fannie 3.5's just peeking over 103-14 at 8:06am. 

There is no scheduled economic today, though the Fed will be buying in the 6-8 year sector at 10:15am, finishing at 11:00. 

The biggest news of the day for the mortgage origination community could come later today when Obama holds a news conference around 1pm, with Q&A around 1:15pm.  It is rumored that he will be announcing the grandfathering of MIP for FHA loans.  According to an article appearing this morning on Time.com

"Under the housing plans Obama was to announce Tuesday, FHA-insured borrowers would be able to refinance their loans at half the fee that the FHA currently charges. FHA borrowers who want to refinance now must pay a fee of 1.15 percent of their balance every year. Officials say those fees make refinancing unappealing to many borrowers. The new plan will reduce that charge to 0.55 percent."

The article lends itself some extra credibility with the following claim:

"A senior administration official described Obama's proposals to The Associated Press on the condition of anonymity to discuss them ahead of the announcement."