MBS MID-DAY: Tentatively Holding Gains After Morning Weakness

By: Matthew Graham •

It's generally been another uneventful day in the shadow of tomorrow's FOMC events.  There just hasn't been anything on the calendar or any unscheduled market event that can compete with the big impact expected from tomorrow's Fed Announcement, forecasts, and press conference.

As such, markets are "going through the motions" for lack of a better term.  At current levels, this has been good for a bit of consolidation after hitting the weakest levels in months at the end of last week. 

Overnight Treasury trading was generally positive and 10yr yields were more than 3bps lower at the open.  MBS were similarly in better shape with Fannie 3.5s up 7 ticks out of the gate.  From there, however, bonds pulled back nearly to negative territory.  They've since found their footing and are about half-way back to their best levels.

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
98-01 : +0-07
FNMA 3.5
101-25 : +0-05
FNMA 4.0
105-01 : +0-04
Treasuries
2 YR
0.5320 : -0.0160
10 YR
2.5690 : -0.0220
30 YR
3.3300 : -0.0110
Pricing as of 9/16/14 12:18PMEST
Morning Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
9:46AM  :  Bond Markets Pulling Back After Stronger Overnight Session
Live Chat Featured Comments
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Victor Burek  :  "The median household income of $51,939 was not statistically different from the $51,759 in 2012, the Census Bureau reported Tuesday. This is the second consecutive year that the annual change was not statistically significant, following two consecutive annual declines. Income is 8% lower than in 2007, the year before the nation entered an economic recession"
Victor Burek  :  "I agree with you JT, they wont change the considerable time language this meeting, it will be the Nov/dec meeting when they have the next presser"
John Tassios  :  "Yes, you are correct. 0 wage growth is one of my main themes of low inflation going forward"
Matthew Graham  :  "right, and I'm saying something similar to what I think I remember you saying. If wages don't rise for the average joe, there's no way to have meaningful inflation. "
John Tassios  :  "Thanks MG, I look at PPI because it gives me an idea for pricing up and down the supply chain "
Matthew Graham  :  "bottom line: it doesn't really matter what producer prices are doing if wage-earners have no money (relatively)"
Matthew Graham  :  "RTRS - U.S. AUG PPI FOR FINAL DEMAND EXFOOD/ENERGY +0.1 PCT (CONS. +0.1 PCT) VS JULY +0.2 PCT"