MBS MID-DAY: After Weaker Start, Stronger Into Fed Buyback
By:
Matthew Graham
•
MBS Live: MBS Morning Market Summary
After Starting in weaker territory vs Friday's levels, MBS and Treasuries rallied back into positive territory into the 10:15am scheduled Fed "Twist" buying in the 2018-2020 maturity range. That brings 10yr yields just back to Friday's best levels and MBS several ticks higher. Fannie 3.5's are up 2 ticks on the day and 7 ticks off their lows to 104-26. Most of the morning's gains occurred too early in the day for most lenders to consider a positive reprice. The positive movement was largely due to a reversal in European markets where previously weaker German Bunds bounced back after the ECB refuted an article in a German paper about their bond-buying intentions.
MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
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Morning Reprice Alerts and Updates
Below is a recap of instant Reprice Alerts and updates issued via email and text alert to MBS Live subscribers this morning.
9:32AM :
ALERT ISSUED:
After Opening Weaker, Bond Markets Reapproach Unchanged Levels
European headlines have returned with a vengeance this week and, in the absence of significant economic data, pushed bond markets around fairly easily. German Bunds led the way higher in yield for US Treasuries as optimism increased over an ECB intervention in Spain. A German paper reported rumored ECB bond-buying details and an ECB spokesperson promptly said the paper shouldn't report what it hasn't confirmed.
That sort of "push back" against the intervention optimism was joined by additional news that Bundesbank remains highly critical of any ECB bond-buying efforts. The push back helped 10yr yields fall from overnight highs around 1.86 down to 1.8244 currently. Fannie 3.5's opened at 104-19 and have moved up to 104-23, just 1 tick lower than Friday's latest levels.
There are no significant economic reports due out today and the week in general is light in terms of digestible data. Volume was moderate overnight, but slightly declined from last week's stronger-than-average summertime days. Currently, bond markets are encountering resistance to breaking into better territory after the earlier rally back to nearly unchanged levels.
That sort of "push back" against the intervention optimism was joined by additional news that Bundesbank remains highly critical of any ECB bond-buying efforts. The push back helped 10yr yields fall from overnight highs around 1.86 down to 1.8244 currently. Fannie 3.5's opened at 104-19 and have moved up to 104-23, just 1 tick lower than Friday's latest levels.
There are no significant economic reports due out today and the week in general is light in terms of digestible data. Volume was moderate overnight, but slightly declined from last week's stronger-than-average summertime days. Currently, bond markets are encountering resistance to breaking into better territory after the earlier rally back to nearly unchanged levels.
Live Chat Featured Comments
A recap of the featured comments from the MBS Live Dashboard's Live Chat feature, utilized by hundreds of industry professionals each day.
Christopher Stevens : "nice to see Europe back from vacation to add some fun to the day"
Jerry T : "that 200dma is moving lower...be nice to see those yields a couple ticks under 1.8! http://stockcharts.com/h-sc/ui?s=$UST10Y"
Gus Floropoulos : "I like your thinking JT"
Jerry T : "1.86 has been hit, what, 3 times in the last few days and nothing higher. Perhaps that's a ceiling on the yield?"
Gus Floropoulos : "nice if we can see some strong buying followed by a squeeze..BANG! "
Brett Boyke : "think it may have to do with the ECB bond yield caps rumor being refuted"
Gus Floropoulos : "idk, but my guess its buying not covering"
Scott Valins : "short covering or new longs?"
Gus Floropoulos : "lets see if 1.8 will break. Good sign this morning, a bunch of talking heads saying that the 10 year is done and stocks are going to infiniti and beyond...usually the opposite happens"
Mike Drews : "when I woke up this morning, the 10yr was -15.....this is a nice surprise."
Matthew Graham : "RTRS- GREEK FOREIGN MINISTER SAYS GREECE WILL PRESENT AN 11.7 BLN EURO REFORM PACKAGE IN SEVERAL WEEKS TO FULFILL REFORM REQUIREMENTS "
Matthew Graham : "RTRS- GERMAN FOREIGN MINISTER WESTERWELLE SAYS GOVERNMENT IS CONVINCED NO SUBSTANTIAL SOFTENING OF AGREEMENT WITH GREECE IS POSSIBLE "
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