MBS MID-DAY: Technical Resistance and Stronger Data Hurting Bond Markets

By: Matthew Graham •

Coming into the week, there were some technical considerations regarding the recent losing streak in stocks and winning streak in bonds.  These serve as a backdrop for this morning's economic data and resulting market movement. 

In short, both trends run the risk of bouncing today, especially in the event of stronger Retail Sales, and this is exactly what's happening so far.  Correlation continues to be strong between stock prices and bond yields with both putting in their domestic session highs and lows at the same times.

It hasn't been a straight shot though.  MBS started weaker, managed to bounce back into 10am, and then fell back to the lows by 11am.  If it's some small solace, prices haven't yet broken into new lows, nor have Treasury yields broken to new highs (both have simply matched the weakest levels from earlier in the morning). 

For MBS, the losses are right on the edge of negative reprice risk, but probably not big enough for most lenders to consider it.

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
97-06 : -0-04
FNMA 3.5
101-08 : -0-04
FNMA 4.0
104-16 : -0-03
Treasuries
2 YR
0.3750 : +0.0200
10 YR
2.6445 : +0.0255
30 YR
3.4851 : +0.0091
Pricing as of 4/14/14 11:44AMEST
Morning Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
10:57AM  :  ALERT ISSUED: Back to Weakest Levels as Stocks Rally
9:58AM  :  MBS Rally Back to Unchanged As Stocks Fall
8:39AM  :  Bond Markets Weaker after Retail Sales Data
Live Chat Featured Comments
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matt Hodges  :  "good commentary for the Week Ahead., MG. thanks."
Matthew Graham  :  "RTRS- US MARCH RETAIL SALES +1.1 PCT, BIGGEST RISE SINCE SEPT 2012 (CONSENSUS +0.8 PCT) VS FEB +0.7 PCT (PREV +0.3 PCT)"
Matthew Graham  :  "RTRS- US MARCH RETAIL SALES EX-AUTOS +0.7 PCT, BIGGEST RISE SINCE FEB 2013 (CONS +0.5 PCT) VS FEB +0.3 PCT (PREV +0.3 PCT)"
Matthew Graham  :  "RTRS- US MARCH RETAIL SALES EX-GASOLINE +1.4 PCT, BIGGEST RISE SINCE MARCH 2010, VS FEB +0.8 PCT"
John Sheadel  :  "Question: holiday shortened week? So markets close early on Friday for Easter, yes? "
Matthew Graham  :  "completely closed"
Matthew Graham  :  "RTRS- U.S. FEB BUSINESS INVENTORIES +0.4 PCT (CONSENSUS +0.5 PCT) VS JAN +0.4 PCT (PREV +0.4 PCT)"
dustin mcalister  :  "anyone else notice a drop in BPS on the 15 year VA loans that seems to be worse than what we lost from Friday to today? "
Joseph Moran  :  "most of my investors opened up .20 to .25 bps worse on the 15 year. for 1 tick down? really?"
dustin mcalister  :  ".25% worse here"
Bryce Schetselaar  :  "i havent been following the VA 15 much...but the conventional 15 seems like it has got the short end of the stick lately, too"