MBS MORNING: Happy 2009. Winds of Change.

Things are still going well this AM.  Not much in the way of data today, plus many market participants still not back in full force until Monday makes today yet another day where prices could move more than warranted.  In these low volume environments, don't put too much stock in prices if you see drastic movements.  In fact, we likely won't really know what price levels "want" to do until after the January settlement on the 13th.  So any inclination to float should be obeyed until then.  Depending on your risk factors, it is still a good idea to set an emergency exit point, as in "how low will I let MBS prices get prior to the 13th before I lock?"  Keep in mind, this may not even come to pass, and even if it does, later January is likely to be better.

Here is the action of the last 2 sessions, with the original base camp line in teal.

So we're obviously floating unless some catastrophic downturn occurs.  ISM just came in slightly worse than expected at 32.4.  Consensus was 35.4.  No reaction in MBS currently, though we have fallen a tick or two from the levels shown in this graph.  Lenders that priced on the come may consider a slight reprice for the worse.  Wouldn't it be nice if you could see a graph like that update in real time as trades occur?  As we've discussed in the past, we'll constantly be rolling our improvements to our service.  And the next big step begins now: Live Data and Analysis.