MBS MID-DAY: Moderate Gains Despite Stronger Data; MBS Outperforming

By: Matthew Graham •

Relative to Friday's trading ranges, MBS are outperforming Treasuries.  Fannie 3.5s are at their highest levels since Tuesday while Treasuries have yet to break today's existing low yields. 

The morning has been relatively uneventful so far, with bond markets generally extending the rally that began at 9am on Friday.  None of the economic data has had much of an impact.  It was stronger-than-expected across the board yet didn't make for any pronounced selling pressure.

Interestingly enough, the release of the IMF's updated forecasts for the US may have been the turning point in a morning that--until that point--had been trending weaker.  It wasn't much of a surprise to see full-year GDP forecasts revised lower thanks to Q1 revisions. 

Perhaps more interesting was the IMF's call for potential growth to remain near 2% for the next several years--notably less optimistic than most (some would argue "more in line with reality").   To be clear, this wasn't a big market mover.  Rather, it simply might be helping bond markets hold their ground on what was already a pretty calm trading day.

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
98-00 : +0-04
FNMA 3.5
102-04 : +0-04
FNMA 4.0
105-11 : +0-04
Treasuries
2 YR
0.4595 : +0.0045
10 YR
2.5952 : -0.0088
30 YR
3.4000 : -0.0120
Pricing as of 6/16/14 11:49AMEST
Morning Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
10:12AM  :  Bounce Back Pauses After Stronger Homebuilder Sentiment
9:30AM  :  Slightly Weaker After Industrial Production Report
8:55AM  :  Bond Markets Moderately Stronger Overnight; Giving Back Some Gains Now
Live Chat Featured Comments
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Victor Burek  :  "what a difference a month makes for builders"
Matthew Graham  :  "RTRS- U.S. JUNE NAHB HOUSING MARKET INDEX 49 (CONSENSUS 47) VERSUS 45 IN MAY"
Christopher Stevens  :  "SK- your statement "if business was good employment would follow" is not as matter of fact as it used to be. Companies are learning to do more with less. Piling more work on the people they have and replacing humans with machines for efficiency. This coupled with our growing population makes job growth more difficult."
Matthew Graham  :  "RTRS - NY FED'S EMPIRE STATE INDEX 19.28 IN JUNE (CONSENSUS 15.00) VS 19.01 IN MAY"
Jeff Anderson  :  "GM, all. Things are better than 2008 but we're not going anywhere fast."
Hugh W. Page  :  "Clearly there are headwinds to the economy growing at historical norms."
Victor Burek  :  "from the graph, it looks like our economy peeked in 2010 and 2011, been sliding lower and lower since"
Hugh W. Page  :  "Hilsenrath article in the WSJ this morning about the Fed likely ratcheting down growth expectations for the future and therefore targeting a "normalized" 10 Yr at something below the historical benchmark of 4%. http://mndne.ws/U285pe"