MBS MID-DAY: Ukraine Headlines Continue Trumping Domestic Data

By: Matthew Graham •

Overnight market movement was once again most visibly affected by headlines relating to the situation in Ukraine.  This time around it was a speech by Putin before a joint session of Russian Parliament.  Overnight gains quickly evaporated, resulting in flat opening ranges for both Treasuries and MBS.

Housing Starts and Consumer Prices both came in close to forecasts.  The only meaningful departure from the consensus was in the stronger-than-expected Building Permits tally, but that means much less when you consider all the strength was in multifamily permits while Single-Family permits actually decreased.

Most recently, vague newswires regarding gunfire at a Ukrainian Army installation in Crimea helped bond markets improve into the noon hour.  This leaves MBS roughly an eighth of a point higher than yesterday's low afternoon range, but not yet back to yesterday morning's levels.

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
96-21 : +0-05
FNMA 3.5
100-28 : +0-04
FNMA 4.0
104-10 : +0-04
Treasuries
2 YR
0.3547 : -0.0083
10 YR
2.6812 : -0.0158
30 YR
3.6249 : -0.0051
Pricing as of 3/18/14 12:14PMEST
Morning Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
9:02AM  :  Bond Markets Unchanged After Morning Data, Putin Parliament Speech
Live Chat Featured Comments
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Christopher Stevens  :  "back to rates...it seems we are again going to hover around 2.70-2.75 until NFP. At some point the employment numbers are going to cause a major shift in the 10YR. What direction that is is questionable but it seems many are thinking it will be towards 3%."
Christopher Stevens  :  "I just don't see employment being that good even w/out weather issues. But I am terrible at forecasting."
Matthew Graham  :  "RTRS- US FEB HOUSING STARTS 907,000 UNIT RATE (CONSENSUS 910,000) VS JAN 909,000 UNITS (PREV 880,000 UNITS)"
Matthew Graham  :  "RTRS- US FEB HOUSING PERMITS 1,018,000 UNIT RATE (CONSENSUS 960,000) VS JAN 945,000 UNIT RATE (PREV 945,000 UNITS)"
Matthew Graham  :  "RTRS - U.S. FEB CPI +0.1 PCT (+0.1005; CONSENSUS +0.1 PCT), EXFOOD/ENERGY +0.1 PCT (+0.1183; CONS +0.1 PCT)"
Matthew Graham  :  "RTRS- U.S. FEB CPI YEAR-OVER-YEAR +1.1 PCT (CONS +1.2 PCT), EXFOOD/ENERGY +1.6 PCT (CONS +1.6 PCT)"
Matthew Graham  :  "RTRS - RUSSIA WILL RETALIATE AGAINST EUROPEAN UNION SANCTIONS - ITAR-TASS CITES FOREIGN MINISTRY"
William McGuirt  :  "chase was 25 bps worse..not understanding it"
Doug Seder  :  "WM, Chase never re-priced yesterday, so I think we are seeing the affects of yesterday sell of on todays rate sheet. "
Matt Hodges  :  "FC included in BK - three year FHA wait time, correct?"
Kenneth Crute  :  "i believe the 3yr clock starts from the transfer date of the FC not the BK date "
Jason Anker  :  "Ken is correct and I've seen the Deed date be 2+ years after the BK date"
Sung Kim  :  "mh - did you get a notice from WF that they will no longer take auto-subs on 2nds?"
Ira Selwin  :  "Sung - After additional review and consideration, Wells Fargo Funding is retracting the Auto Subordinations Ineligible for Purchase by Wells Fargo Funding article originally published in Newsflash C14-021 dated March 3, 2014."
Sung Kim  :  "so on 3/3 they sent out a memo saying they will not allow, and then last night they send out a memo saying it is allowed?"
Ira Selwin  :  "Yep. On 3/3 - they said - Due to the inability to show clear evidence of the subordination, Sellers are reminded that Wells Fargo Funding will not purchase loans with auto subordinations. Investors require documentation to be provided and retained in the loan file supporting the subordination of any prior financing. An auto-subordination would not meet this requirement."
Ira Selwin  :  "Now - After additional review and consideration, Wells Fargo Funding is retracting the Auto Subordinations Ineligible for Purchase by Wells Fargo Funding article originally published in Newsflash C14-021 dated March 3, 2014. For both Home Equity Line of Credit (HELOC) and Closed End Loans, Wells Fargo Funding requires subordinate financing to be recorded and clearly subordinate to our first mortgage. In addition to meeting Wells Fargo Funding purchase eligibility requirements. Sellers should continue to follow applicable state and Agency requirements specific to auto-subordination."