MBS MID-DAY: Steady, Sideways To Slightly Improved
By:
Matthew Graham
•
MBS Live: MBS Morning Market Summary
In a shocking twist of events, bond markets were once again completely apathetic overnight and have been sideways to slightly improved so far this morning. Why is this shocking? Well, it's not really. That sarcasm was a necessary byproduct of the utter lack of motivation for bond markets to do much of anything or pay much attention to available economic data. Even the European headlines overnight failed to get anything started. We will give a little credit to the fact that MBS and Treasuries did feign some selling pressure following the better-than-expected Consumer Sentiment numbers, but all it takes is a half-step back to see that the data didn't affect trading levels in all but the most microscopic frames of reference. Sideways around 105-12 in Fannie 3.0s...
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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Pricing as of 11:07 AM EST |
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.
10:02AM :
ECON: Consumer Sentiment Jumps To Five Year High
The Thomson Reuters/University Of Michigan Consumer Sentiment Index Rose to it's highest level since September 2007. The headline index rose to 83.1 from 78.3 last month. Economists surveyed by Reuters expected a reading of 78.0.
Though all of the reports internal components were in better territory than September's final numbers, the "12-month economic outlook" component rose strikingly from 87 to 97. Inflation expectations fell to their lowest level since March 2009.
Though all of the reports internal components were in better territory than September's final numbers, the "12-month economic outlook" component rose strikingly from 87 to 97. Inflation expectations fell to their lowest level since March 2009.
9:16AM :
ALERT ISSUED:
Bond Markets Slightly Stronger In Impressively Inconsequential Trading
With thin volume and narrow trading ranges, the overnight session was impressively unimportant for bond markets. The best way we can think to describe the anticlimax of the past two domestic vs overnight sessions is that whatever uninspiring amount of air that existed in Bond markets' lungs, was simply, slowly, and uneventfully exhaled. In a word, "meh."
Although it didn't happen until 11:30-ish yesterday, the overnight exhalation has been followed by the reappearance of some level of activity, with Treasuries again rallying as they take their next breath.
MBS are just along for the ride, trying to keep pace as best they can into a moderate rally after hitting weekly highs yesterday afternoon. We're breaking through the 105-11 technical level at the moment and although we wish that was occurring in better volume, it's better than nothing.
Although we had several European headlines to digest, none of them have proven to be big market movers (even though we could imagine that some of them would have been in sessions past, building the sense that markets are determined to tune out today).
The next and last piece of economic data this morning hits in about half an hour with Consumer Sentiment. After that, things could die down fairly quickly if it doesn't deviate much from the consensus of 78.0.
MBS are currently up 3 ticks in Fannie 3.0s to 105-12 and 10yr Treasuries are down to 1.661. S&Ps are about 10pts lower than yesterday's mid-morning highs.
Although it didn't happen until 11:30-ish yesterday, the overnight exhalation has been followed by the reappearance of some level of activity, with Treasuries again rallying as they take their next breath.
MBS are just along for the ride, trying to keep pace as best they can into a moderate rally after hitting weekly highs yesterday afternoon. We're breaking through the 105-11 technical level at the moment and although we wish that was occurring in better volume, it's better than nothing.
Although we had several European headlines to digest, none of them have proven to be big market movers (even though we could imagine that some of them would have been in sessions past, building the sense that markets are determined to tune out today).
The next and last piece of economic data this morning hits in about half an hour with Consumer Sentiment. After that, things could die down fairly quickly if it doesn't deviate much from the consensus of 78.0.
MBS are currently up 3 ticks in Fannie 3.0s to 105-12 and 10yr Treasuries are down to 1.661. S&Ps are about 10pts lower than yesterday's mid-morning highs.
8:43AM :
ECON: Producer Prices Rise More Than Expected But Core Stays Tame
- PPI +1.1 vs +0.7 consensus
- Core PPI 0.0 vs +0.2 consensus, weakest in 1 year
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The Producer Price Index for finished goods rose 1.1 percent in September, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Prices for finished goods advanced 1.7 percent in August and moved up 0.3 percent in July. At the earlier stages of processing, prices received by manufacturers of intermediate goods rose 1.5 percent in September, and the crude goods index advanced 2.8 percent. On an unadjusted basis, prices for finished goods climbed 2.1 percent for the 12 months ended September 2012, the largest rise since a 2.8-percent increase for the 12 months ended March 2012.
- Core PPI 0.0 vs +0.2 consensus, weakest in 1 year
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The Producer Price Index for finished goods rose 1.1 percent in September, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Prices for finished goods advanced 1.7 percent in August and moved up 0.3 percent in July. At the earlier stages of processing, prices received by manufacturers of intermediate goods rose 1.5 percent in September, and the crude goods index advanced 2.8 percent. On an unadjusted basis, prices for finished goods climbed 2.1 percent for the 12 months ended September 2012, the largest rise since a 2.8-percent increase for the 12 months ended March 2012.
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.
Matt Hodges : "my hope is that WF is thinking the housing market is stimulated with strong quarters - refis are great, but we need some serious housing activity"
Matthew Graham : "RTRS- WELLS FARGO & CO CFO SAYS EXPECTS 'PRETTY STRONG' MORTGAGE QUARTER IN FOURTH QUARTER, HOPES IT WILL LAST 'FEW' QUARTERS "
Matthew Graham : "THOMSON REUTERS/U. OF MICH CONSUMER 5-YEAR INFLATION OUTLOOK LOWEST SINCE MARCH 2009 "
Matthew Graham : "THOMSON REUTERS/U. OF MICH CONSUMER SENTIMENT HIGHEST SINCE SEPT 2007, CONSUMER EXPECTATIONS HIGHEST SINCE JULY 2007 "
Matthew Graham : "THOMSON REUTERS/U. OF MICH 12-MONTH ECONOMIC OUTLOOK INDEX PRELIMINARY OCTOBER 97 VS FINAL SEPT 87 "
Matthew Graham : "RTRS- THOMSON REUTERS/U. OF MICH US CONSUMER SENTIMENT PRELIMINARY OCTOBER 83.1 (CONSENSUS 78.0) VS FINAL SEPT 78.3 "
Christopher Stevens : "Perhaps I found my answer from the Wells earnings report as their Net Interest Income declined also. "Income from the available-for-sale securities portfolio declined as the pace of MBS pay-downs increased in response to lower interest rates, and we replaced a large portion of the run-off with lower yielding, but shorter duration securities." "
Adam Quinones : "translation..."buy homes so we can start releasing more inventory soon""
Christopher Stevens : "Net Interest margins declined from 2.47% to 2.43%. Dimon did say "Importantly, we believe the housing market has turned.""
MMNJ : "unless they are calculating net interest margin in Bizarro World, there is no way they had lower interest margin.....no?"
Christopher Stevens : "JPM states in conf call that total loans and net interest margin both declined? That seems odd in this environment."
Matthew Graham : "RTRS- U.S. SEPT YEAR-OVER-YEAR PPI +2.1 PCT, BIGGEST INCREASE SINCE MARCH, (CONS +1.8 PCT), CORE +2.3 PCT (CONS +2.5 PCT) "
Matthew Graham : "RTRS - U.S. SEPT PPI EXFOOD/ENERGY 0.0 PCT, WEAKEST SINCE OCT 2011, (CONS +0.2 PCT) VS AUG +0.2 PCT "
Matthew Graham : "RTRS - U.S. SEPT PPI +1.1 PCT (CONSENSUS +0.7 PCT), VS AUG +1.7 PCT "
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