MBS RECAP: Bonds Manage Resilience Despite Headwinds

By: Matthew Graham

A clearly-defined break to another record high in stocks and another huge day for corporate debt issuance presented two significant headwinds for bond markets today.  Yet MBS and Treasuries both managed to hold in positive territory. 

While that may be a relatively resilient showing, we have yet to see a committed break in the other direction.  10yr yields remain blocked from entry into the 2.2's and mortgage rates similarly haven't been able to get back into the "high 3's" except among the lowest-priced fringe.  On both fronts though, we're close.  So that seems positive enough.

Now it's up to FOMC Minutes (tomorrow afternoon) and the rest of this week's economic data to see if will make enough of a difference to spark a bigger move for bonds.  It might have seemed like a good deal of movement was centered on this morning's Producer Price data, but this was merely a temporal coincidence.  The kinks are still being worked out of the newly reformatted "PPI Final Demand" data, and that was made painfully evident as this morning's headline showed higher inflation owing simply to math and having nothing to do with the reality of price movement.  After this, the report will be taken even less seriously than it already had been.


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
100-06 : +0-04
FNMA 3.5
103-17 : +0-04
FNMA 4.0
106-09 : +0-03
Treasuries
2 YR
0.5040 : -0.0080
10 YR
2.3170 : -0.0230
30 YR
3.0400 : -0.0240
Pricing as of 11/18/14 5:07PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
12:18PM  :  ALERT ISSUED: Negative Reprice Risk Increasing as MBS Turn Red
9:59AM  :  Corporate Debt Considerations; How to Sound Smart When Talking About Producer Prices

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matt Hodges  :  "ira.gov. have borrower set up account and get transcripts that way"
Joseph Daquino  :  "Borrower filed taxes on 10/15. They owed money and paid it. Still no transcripts. What is the typical turn time for the IRS on this?"
Jason Anker  :  "FHA doesn't need 2 years for family, just most recent return. They do want a 2 year work history and I've never used HS as the education portion of my 2 yr work history. "
Clayton Sandy  :  "working for family has always required two years full work history and documentation. Can you show she's going to school to become an appraiser?"