MBS MID-DAY: Snowball Buying Brings Bonds to Best Levels in a Month.

By: Matthew Graham •

Earlier this morning, there was a solid 30 minutes where it looked like stronger economic data would make things challenging for bond markets heading into the afternoon.  But half an hour is as long as that lasted.

Multiple asset classes around the globe embarked on a massive "risk-off" move starting around 9am ET.  Key participants included Japanese Yen, Eurodollars, Global equities markets and US bond markets.  All of the above have moved away from risk (stocks lower, Yen/Euro stronger, Bonds/MBS Stronger).

Frustratingly, there's no overt cause&effect in play.  Nevertheless, the move is substantial, with MBS up 3/8ths of a point and Treasuries lower by more than 50bps in 10yr Notes.  Stocks are off more than 2% from morning highs.  The gains bring MBS and Treasuries to their best levels in a month.  Most lenders have repriced for the better.  If you haven't seen one yet, you likely will.

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
97-10 : +0-13
FNMA 3.5
101-14 : +0-13
FNMA 4.0
104-22 : +0-12
Treasuries
2 YR
0.3551 : -0.0119
10 YR
2.6374 : -0.0486
30 YR
3.5228 : -0.0422
Pricing as of 4/10/14 12:33PMEST
Morning Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
11:37AM  :  Snowball Buying Increases for Bonds; Positive Reprice Potential is Ongoing
10:32AM  :  MBS and Treasuries Breaking into Day's Best Levels; Some Early Reprice Potential
8:40AM  :  Bond Markets Giving Up Overnight Gains After Stronger Jobless Claims
Live Chat Featured Comments
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Christopher Stevens  :  "that 10YR is looking like one hell of a coiled snake the last 2 1/2 months. Lot's of stored energy."
Sung Kim  :  "was thinking the same thing cs"
Matthew Graham  :  "RTRS - US JOBLESS CLAIMS FELL TO 300,000 APRIL 5 WEEK, LOWEST SINCE MAY 12, 2007 WEEK (CONSENSUS 320,000) FROM 332,000 PRIOR WEEK (PREVIOUS 326,000)"
Matthew Graham  :  "RTRS- US CONTINUED CLAIMS FELL TO 2.776 MLN MARCH 29 WEEK, LOWEST SINCE JAN 19, 2008 WEEK (CONS. 2.850 MLN) FROM 2.838 MLN PRIOR WEEK (PREV 2.836 MLN)"
Jeff Anderson  :  "GM, all. Is the data feed off still the trading pit? No reaction to claims?"
Sung Kim  :  "muted thus far, but we lost 4"
Sung Kim  :  "something is keeping the lid on this, 300k print is darn strong"
John Sheadel  :  "Every time I have to deal with CFPB created complications or QM whatnot, Red always pops into my head: I know what you think it means, CFPB. To me, [perfect safety is] just a made up word. A politician's word, so young fellas like yourself can wear a suit and a tie, and have a job. "
Andy Pada, Jr.  :  "We're doing pretty well despite jobless claims at "7 year lows.""
Tim McNerney  :  "7 year lows...what does that headline really mean...ugh!"
Jeff Anderson  :  "Just getting back in. What's today's bond catalyst? Didn't see anything in the alerts."
Matthew Graham  :  "JA, All the gains so far have been within the range set overnight. Chinese Import/Exports were mentioned elsewhere, but there wasn't much bond market reaction. Overnight rally was slow and steady. Stock coming out of the gate weak this AM has coincided with bonds revisiting overnight low yields (almost). Tradeflow-related, and FOMC follow-through from accounts that might not necessarily been able to trade it yesterday."