MBS MID-DAY: Back to Unchanged After Stronger Consumer Confidence Data

By: Matthew Graham

Bond markets started the day little-changed from the previous session and having seen little volatility overnight.  Although it wasn't destined to be too consequential, the Durable Goods data was at least interesting--setting a record for month-over-month improvement  thanks to Boeing's 777 order glut.  The internal components of the report that ignore aircraft were markedly weaker than expected, however. 

Bond markets improved following the weak internals with both MBS and Treasuries hitting their best levels in over a week.  The turning point came with the open of cash trading in stocks and was accelerated by the stronger-than-expected Consumer Confidence data.  Unlike Durable Goods earlier this morning, the internal components of the confidence data were stable to strong.  Notably, the key employment tracking metric of the report ("jobs hard to get") fell to it's lowest/best level since July 2008. 

The losses haven't been severe.  Fannie 3.5s have merely returned to hover around unchanged levels.  That said, even unchanged levels are far enough from those seen during rate sheet print times to connote some small amount of negative reprice risk.


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
99-04 : +0-02
FNMA 3.5
102-23 : +0-01
FNMA 4.0
105-26 : +0-01
Treasuries
2 YR
0.5080 : +0.0040
10 YR
2.3890 : +0.0000
30 YR
3.1460 : +0.0110
Pricing as of 8/26/14 12:29PMEST

Morning Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
11:03AM  :  ALERT ISSUED: Negative Reprice Risk Increasing Slightly as MBS Push Lows
10:39AM  :  Off Highs Following Stronger Confidence Data; Negative Reprices on Hold For Now
9:08AM  :  Bond Markets Improve Despite Record-Setting Durable Goods Report

Live Chat Featured Comments
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Jason Anker  :  "good sign as its still vacation season - should be a good fall. "
Jason Anker  :  "picking up for me this week, was slow with purchase in July and early Aug, now it's back to spring levels of apps"
Jason Anker  :  "it does seem that prices have leveled out in my market"
Matthew Graham  :  "significantly more followed. "
Jason Anker  :  "is the seasonal number the more follwed number?"
Sung Kim  :  "Whoa. Two months in a row neg for case ?"
Matthew Graham  :  "RTRS- US JUNE HOME PRICES IN 20 METRO AREAS -0.2 PCT SEASONALLY ADJ (CONSENSUS 0.0 PCT) VS -0.3 PCT IN MAY- S&P/CASE-SHILLER"
Matthew Graham  :  "as the prophecy foretold. Could be big, and won't matter"
Matthew Graham  :  "RTRS- U.S. JULY DURABLES EX-TRANSPORTATION ORDERS -0.8 PCT (CONS +0.5 PCT) VS JUNE +3.0 PCT (PREV +1.9 PCT)"
Victor Burek  :  "22.6?"
Matthew Graham  :  "RTRS - US JULY DURABLES ORDERS RECORD HIGH +22.6 PCT (CONSENSUS +7.5 PCT) VS JUNE +2.7 PCT (PREV +1.7 PCT)"