MBS MID-DAY: Holding Close To Unchanged Amid Lack of Data
By:
Matthew Graham
•
MBS Live: MBS Morning Market Summary
It's been one of "those Mondays" so far with newswires and market movements struggling to keep market watchers entertained. That's a good thing in this case as it frees up time for mortgage market participants at various stations in the assembly line to focus on opportunities or challenges presented by last week's big swings. The fact that we're hanging in around 2 ticks on either side of unchanged for most of the day keeps those challenges from getting any bigger and keeps the opportunities afforded by the lowest rates since January from slipping away. Even Treasuries were relatively docile overnight, improving during Asian hours, slipping during European hours and coming back home early in the US session. With no data on the calendar (no significant data), trading ranges have stayed quite narrow in the first 3 hours despite S&Ps taking a relatively bigger tumble from 8am-1030am.
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.
9:51AM :
Curbing asset purchases could reduce risks: Fed's Pianalto
Cleveland Fed President Sandra Pianalto said the central bank's balance sheet could swell to $4 trillion by year end, arguing that a smaller stable of assets "than many market participants currently envision" could mitigate potential risks.
"Given our limited experience with our asset purchase programs, slowing the pace of purchases could help minimize the potential risks associated with our large and growing balance sheet," she said in prepared remarks to an economic forum.
"Even continuing asset purchases at a reduced pace, and limiting the size of the overall program, would enable the Federal Reserve to continue adding accommodation and providing meaningful support to economic growth and job creation."
"Given our limited experience with our asset purchase programs, slowing the pace of purchases could help minimize the potential risks associated with our large and growing balance sheet," she said in prepared remarks to an economic forum.
"Even continuing asset purchases at a reduced pace, and limiting the size of the overall program, would enable the Federal Reserve to continue adding accommodation and providing meaningful support to economic growth and job creation."
9:15AM :
Bond Markets Edge Into Positive Territory After US Open
By Friday afternoon, Treasuries had retraced about half of their NFP-inspired rally. This apparently set them up to weather the Asian and European sessions with more aplomb today. In an uncharacteristically active overnight session, volatility was uncharacteristically light with 10yr yields capping out at 1.73 versus Friday's latest levels just under 1.72. Not too shabby considering the pace of last weeks move!
Treasuries rallied a bit during Asian hours but the bigger volume and more pronounced weakness arrived with the European session. No news was good news for Italy, with Italian credit spreads leading the way higher for Euros and Treasuries despite flatter Bunds. German debt joined in the move after a stronger Industrial Output report.
But all the while, US Treasuries never made too much of a fuss, and the highest yields of the day just after 8am were met with good buying out of the gate from domestic market participants. This has now resulted in 10's making it back to unchanged levels vs Friday and MBS climbing out of a few ticks of weakness to sit 2 ticks in the green.
10's are currently .0013 lower on the day at 1.7127 and Fannie 3.0s are 2 ticks higher at 104-12. S&P Futures are off their overnight highs and now perfectly in line with Friday's 5pm levels.
Treasuries rallied a bit during Asian hours but the bigger volume and more pronounced weakness arrived with the European session. No news was good news for Italy, with Italian credit spreads leading the way higher for Euros and Treasuries despite flatter Bunds. German debt joined in the move after a stronger Industrial Output report.
But all the while, US Treasuries never made too much of a fuss, and the highest yields of the day just after 8am were met with good buying out of the gate from domestic market participants. This has now resulted in 10's making it back to unchanged levels vs Friday and MBS climbing out of a few ticks of weakness to sit 2 ticks in the green.
10's are currently .0013 lower on the day at 1.7127 and Fannie 3.0s are 2 ticks higher at 104-12. S&P Futures are off their overnight highs and now perfectly in line with Friday's 5pm 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.
Matthew Graham : "1.67-ish looks good too. I was pleasantly surprised to see 1.73 get scooped up as well as it did this morning. "
Scott Rieke : "MG - looks like we were right about the next resistance level in 10s - street color tells me desks are advising new shorts at ~1.60"
Ted Rood : "Freddie MBS lagging its counterparts today."
Matthew Graham : "looks like equities are having a case of the Mondays"
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