MBS MID-DAY: Bond Markets Slightly Stronger After Volatile Start

By: Matthew Graham •

While the overnight sessions was relatively uneventful, the first half of the domestic session has seen some decent volatility.  After starting out in positive territory, bond markets sold off fairly quickly starting around 9:30am. 

Chicago PMI was weaker than expected, but Treasuries and MBS continued to lose ground until just after 10am.  That's a bit of a paradox considering 10am was the day's only piece of exceptionally strong economic data.  Pending Home Sales rose at the quickest pace since the 2010 first-time-homebuyer tax credit, reaching the best levels since mid 2013.

Whatever the original motivation may have been for selling bonds, it had run its course by 10:04am and we've been improving gradually ever since.  MBS are now back well into positive territory and 10yr yields are down just over 1bp, both near the middle of Friday's ranges.

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
98-24 : +0-04
FNMA 3.5
102-29 : +0-05
FNMA 4.0
106-03 : +0-04
Treasuries
2 YR
0.4607 : +-0.0003
10 YR
2.5196 : -0.0124
30 YR
3.3441 : -0.0189
Pricing as of 6/30/14 12:05PMEST
Morning Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
10:57AM  :  IMPORTANT: New Version of MBS Live Available
10:41AM  :  MBS Snap Back from Morning's Weakest Levels
9:50AM  :  ALERT ISSUED: MBS and Treasuries now at Weakest Levels Despite Tame Chicago PMI
9:20AM  :  Bond Markets Moderately Stronger Overnight With Help From Europe
Live Chat Featured Comments
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Chris Hooker  :  "MG, if your announcement regarding the new version is the one I have, it's incredible. The mobile app is crazy, I played golf with the owner of our hedge fund and my app was better than his! "
Matthew Graham  :  "RTRS- U.S. MAY PENDING HOME SALES -5.2 PCT FROM MAY 2013"
Matthew Graham  :  "RTRS- U.S. MAY PENDING HOME SALES INDEX +6.1 PCT, LARGEST GAIN SINCE APRIL 2010, (CONSENSUS +1.5 PCT) TO 103.9 - NAR"
Matthew Graham  :  "RTRS- CHICAGO PURCHASING MANAGEMENT INDEX 62.6 IN JUNE (CONSENSUS 63.0) VS 65.5 IN MAY"
Matthew Graham  :  "looks like PMI will be steady or weaker"
Matthew Graham  :  "it can. Yeah, the max buying is around there, but it varies depending on what's available and smart. My thesis on daily Fed buying is that it can't reliably be used to our advantage. The only times it can sort-of do that, it's limited to suggesting changes in relative performance vs Treasuries."
John McClellan  :  "I read where they were buying 2b today"
John McClellan  :  "MG - does Fed buying still effect the price on a day to day basis when they do it?"
Hugh W. Page  :  "Is it me or do the markets (all of them) seem very complacent right now?"
Hugh W. Page  :  "I agree"
Matt Hodges  :  "i smell locking opportunities early in the week, especially after today's Week Ahead"