MBS MID-DAY: Bond Markets Improving Despite Stronger Data and Stocks

By: Matthew Graham •

This morning's day ahead commentary asked "will bonds continue to defy stocks?" 

The answer appears to be an emphatic "yes!"

The S&P is up well over 20 points from opening levels and right around 30 points from yesterday's close, yet Treasuries are very nearly unchanged.  Not only that, but they've been improving over the past 2 hours while stocks have seen some of their best gains.

The news is even better for MBS, which just now turned positive on the day (Fannie 3.5s) after being down nearly a quarter of a point earlier.

Economic data was inconsequential as far as bond markets were concerned.  In fact, the time leading up to and away from the 10am Existing Home Sales data was the least volatile of the day with 10yr yields essentially flatlining at 2.22.

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
100-22 : -0-02
FNMA 3.5
103-25 : -0-01
FNMA 4.0
106-10 : +0-00
Treasuries
2 YR
0.3580 : +0.0030
10 YR
2.2080 : +0.0140
30 YR
2.9810 : +0.0120
Pricing as of 10/21/14 12:09PMEST
Morning Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
9:40AM  :  Bond Markets Weaker After European Bond Buying Update
Live Chat Featured Comments
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "5.2 pct gain in condos/co-ops vs 2.0 pct gain in single fam"
Jeff Anderson  :  "How much of that # is multi family? Stats on # of sales in my county has been down YOY and monthly the last 3 months."
Matthew Graham  :  "RTRS - US NAR SAYS 10 PCT OF U.S. SEPT EXISTING HOME SALES WERE DISTRESSED VERSUS 8 PCT IN AUG"
Matthew Graham  :  "RTRS- US SEPT NATIONAL MEDIAN PRICE FOR EXISTING HOMES $209,700, +5.6 PCT FROM SEPT 2013"
Matthew Graham  :  "RTRS - US SEPT INVENTORY OF HOMES FOR SALE 2.30 MLN UNITS, 5.3 MONTHS' WORTH"
Matthew Graham  :  "RTRS - US SEPT EXISTING HOME SALES 5.17 MLN UNIT RATE, HIGHEST SINCE SEPT 2013 (CONSENSUS 5.10 MLN), VS AUG 5.05 MLN (PREV 5.05 MLN)-NAR"
Sung Kim  :  "ergo, the whole inventory argument earlier this year was a bit exaggerated. i think that the inventory argument has to be prefaced with "at least not enough for the CURRENT level of demand""
Matt Hodges  :  "in my market, i see fear of trying to sell and then buy a larger house and unwillingness amongst the 20 somethings to buy - they want to be mobile and have memories of the crash 7 years ago"
Sung Kim  :  "i think it's more a a shift in attitudes towards homeownership... bringing back 97% financing is not going to jump start the market... although 100% will definitely"
Sung Kim  :  "i not sure how much buy back risk and lack of low down payment loan programs are contributing to this lackluster housing market"
Christopher Stevens  :  "WSJ says Mel Watts ability to persuade banks to reasses overlays because Fannie and Freddie will provide details on what faults can trigger a re-purchase won't make banks charge down the housing field. "