MBS RECAP: Calm Afternoon for Bond Markets, Holding Post-Data Gains

By: Matthew Graham •

The overnight session ushered trading levels into just slightly weaker territory in the first part of the domestic session.  In other words, this morning's lower prices were a linear extension of yesterday's trend, but were stopped short by the weaker economic data. 

That reversal process took some doing, however.  The weaker ADP numbers at 8:15am only seemed to slow down the selling momentum--at best, deflecting it toward a more sideways path, but certainly not reversing it.  Even after the weakest ISM Services PMI since 2010, bond markets still weren't eager to stampede into positive territory.

The rally eventually happened, but it took about 30 minutes of tentative 2-way trading to make it happen.  Even then, Treasuries have been very clear in their efforts to go now lower in yield than 'unchanged' levels around 2.69.  MBS managed a few ticks of improvement, but have been limited to 1-2 ticks in the afternoon hours.  This was enough of a gap from morning rate sheet print times to justify positive reprices for several lenders.

MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
MBS
FNMA 3.0
96-26 : +0-02
FNMA 3.5
101-03 : +0-03
FNMA 4.0
104-18 : +0-02
Treasuries
2 YR
0.3331 : +0.0001
10 YR
2.6905 : +0.0005
30 YR
3.6335 : -0.0035
Pricing as of 3/5/14 3:55PMEST
Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
10:27AM  :  ISM Services Weaker, Especially Employment; Bonds Hold Ground
8:41AM  :  Bond Markets Weaker Overnight; Little-Changed After ADP Data
MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matt Hodges  :  "there is no R/T VA refi"
Matt Hodges  :  "its cashout or IRRRL"
Tim McNerney  :  "right so if NOT existing va loan then NOT eligible for IRRL correct?"
Paul Philbin  :  "thats correct Tim"
Paul Philbin  :  "The funding fee is based on whether the borrower has used his entitlement before.. Not whether the current loan is a VA."
Brian Bockholdt  :  "How bad would we be getting crushed if the numbers even just came it at projections today? #greenishardwork"
robert clark  :  "According to the beige book, weather has impacted the economy."
Matthew Graham  :  "yeahRTRS - U.S. FEDERAL RESERVE SAYS ECONOMIC ACTIVITY DECLINED IN TWO OF 12 REGIONS IN JANUARY AND EARLY FEBRUARY, MOSTLY DUE TO WEATHER- BEIGE BOOK"
Hugh W. Page  :  "From the "Summary" : Reports from most of the twelve Federal Reserve Districts indicated that economic conditions continued to expand from January to early February. Eight Districts reported improved levels of activity, but in most cases the increases were characterized as modest to moderate. New York and Philadelphia experienced a slight decline in activity, which was mostly attributed to the unusually severe weather experienced in those regions. Growth slowed in Chicago, and Kansas City reported that conditions remained stable during the reporting period. The outlook among most Districts remained optimistic. "