MBS MID-DAY: Holding Ground at Slightly Weaker Levels; Typical Monday Quietness

By: Matthew Graham •

As is frequently the case for Monday's during the summer, bond markets have not been very active.  Trading levels have remained in a narrow range as well, with Fannie 3.5s occupying only about a quarter of Friday's range. 

Moderate weakness was intact from the overnight session.  Treasury yields opened higher in Asia and have drifted less than 2bps higher since then.  Pressure continued during the European session as stocks and bond yields move higher together.

There was no significant reaction to the NAHB Housing Market Index data.  Incidentally, it was released a few minutes early, and came in slightly stronger than expected.  At the very least, we could conclude that it did nothing to help stem the modestly weaker trend.

Bond markets are currently staying near their weakest levels of the day as the European session wraps up.  "Weakness" is relative, however, as this is one of only 2 days this year where 10yr Treasuries are trading under 2.40.

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
99-01 : -0-09
FNMA 3.5
102-21 : -0-06
FNMA 4.0
105-23 : -0-05
Treasuries
2 YR
0.4190 : +0.0080
10 YR
2.3790 : +0.0340
30 YR
3.1760 : +0.0420
Pricing as of 8/18/14 12:10PMEST
Morning Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
10:29AM  :  ALERT ISSUED: Slight Pressure into Stock Market Open, On the Edge of Negative Reprice Risk
9:24AM  :  Bond Markets Pull Back Slightly as Flight-to-Safety Pauses
Live Chat Featured Comments
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Victor Burek  :  "home builder confidence out early"
Hugh W. Page  :  "Interesting that they used the word "Re-evaluating" in the title of the Conference theme. Seems to indicate we might get some unique observations perhaps when Yellen speaks on Friday?"
Victor Burek  :  "wages will be the main topic"
Hugh W. Page  :  "I think we'll get a lot of talk about the Labor Markets this week given the theme of the Jackson Hole Conference this year. "Re-Evaluating Labor Market Dynamics""
Sung Kim  :  "Rates stay here through EOM then we should see good improvement. "
Sung Kim  :  "They aren't moving rates because they have a hedge in place and they need to work through current pipe of locked loans"