MBS MID-DAY: Bond Markets Holding Near Unchanged Levels After Stronger Morning

By: Matthew Graham •

Treasuries were moderately stronger overnight resulting in positive opening levels for MBS.  Both continued to improve until the 9:30am stock market open.  This continues to be the most active time of day for bond markets as stocks continue to avoid committing to a fuller-fledged bounce back or a return to last week's death spiral.  Long story short, bonds still want to "be there" in case the latter transpires.

Stocks and European bond markets have been the only games in town when it comes to motivating movement in US bond markets.  While trading is still active by historical standards, it's shaping up to be the calmest day since October 10th. 

The mid-morning weakness came at the wrong time for some lenders who had priced rate sheets right in line with the highs of the day.  The losses were just enough to prompt at least one negative reprice.  That said, bond markets are holding up fairly well considering the modest gains in stocks. 

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
100-24 : +0-03
FNMA 3.5
103-26 : +0-03
FNMA 4.0
106-10 : +0-01
Treasuries
2 YR
0.3510 : -0.0239
10 YR
2.1850 : -0.0138
30 YR
2.9670 : -0.0055
Pricing as of 10/20/14 12:46PMEST
Morning Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
10:37AM  :  ALERT ISSUED: Negative Reprice Risk Already a Consideration
9:40AM  :  Stocks and Europe Help Bond Markets Back Into Positive Territory
Live Chat Featured Comments
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Hugh W. Page  :  "So traders don't think so...."
Matt Hodges  :  "Hugh: Matthew Graham: 10/15/14 9:06am RTRS - U.S. RATES FUTURES IMPLY TRADERS NOW SEE FED RAISING POLICY RATES IN Q1 2016"
Hugh W. Page  :  "Interesting dynamic as we remove QE. Emerging Markets, most importantly China, slow and will slow more feeding the weaker global growth story. This affects corporate earnings, and stock valuations. Can we really handle a rate increase by the Fed next year? "
Matthew Graham  :  "This guy is one of the voices of opposition to a more unencumbered bond-buying program in the EU. So to whatever extent this is seen as a prelude to more of a compromise, it's positive for bond markets."
Matthew Graham  :  "RTRS- GERMANY'S SCHAEUBLE SAYS DETERMINED TO STRENGTHEN INVESTMENTS WITHIN LIMITS OF WHAT CAN BE DONE"
Matthew Graham  :  "RTRS- GERMANY'S SCHAEUBLE SAYS EUROPE IN A PHASE WHERE ECONOMY IS WEAKENING"