MBS MID-DAY: Volatility Within a Range, but Little Change

By: Matthew Graham •

If today's bond market movements were a ball game, it would be the kind you like to see, with numerous lead changes, no runaway victory, and the home team leading going into the half. 

Bonds started out in stronger territory overnight as the NYC Ebola case was confirmed and global markets sympathized with the risk-off bid (i.e. stocks sold, bonds bought).  The morning's most significant event hit just after US markets opened when sources said that 25 banks were set to fail the European Central Bank's stress test.  Official results are expected on Sunday.

Bond markets initially rallied on the news, but it was short-lived.  While the news was big, it wasn't altogether unexpected.  That brief, initial rally set the day's floor under bond yields and we've been weaker ever since.  Fortunately, it started us off from a strong enough point to remain in positive territory currently. 

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
100-13 : +0-03
FNMA 3.5
103-18 : +0-02
FNMA 4.0
106-08 : +0-04
Treasuries
2 YR
0.3900 : -0.0040
10 YR
2.2620 : -0.0150
30 YR
3.0360 : -0.0130
Pricing as of 10/24/14 1:17PMEST
Morning Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
11:25AM  :  ALERT ISSUED: Negative Reprice Risk Increasing; Bonds Revisit Weakest Levels
9:24AM  :  Bond Markets Hit Troubling Resistance After Overnight Gains
Live Chat Featured Comments
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "super volatile historically."
Jeff Anderson  :  "Did New Home Sales take a page of the 2013 Initial Jobless Claims playbook and revise down the previous month to say that this month went up?"
Victor Burek  :  "pretty large revision lower"
Matt Hodges  :  "still have structural problems with small to medium builder's access to credit"
Matthew Graham  :  "RTRS - US SEPT SINGLE-FAMILY HOME SALES +0.2 PCT VS AUG +15.3 PCT (PREV +18.0 PCT)"
Matthew Graham  :  "RTRS- US SEPT SINGLE-FAMILY HOME SALES 467,000 UNIT ANN. RATE, HIGHEST SINCE JULY 2008 (CONS. 470,000) VS AUG 466,000 UNIT RATE (PREV 504,000)"
Andrew Horowitz  :  "we have a tendency of having positive stock days to shrug off bad news"
John Tassios  :  "I agree with all 5 points El Erian stated in his commentary on the FED."
Andrew Horowitz  :  "i would not be surprised to see another positive day in stocks,"
Christopher Stevens  :  "El-Erian take on what Fed will do next week. http://mndne.ws/1t8rh3b"
Victor Burek  :  "ECB documents shows 25 banks set to fail health check"