MBS MID-DAY: Holiday Market Apathy in Full Effect

By: Matthew Graham •

It's a real snooze-fest out there, folks.  Volumes were already dropping to nearly half of their recent average by Friday, and will be lucky to break the one-third mark today.  Both Treasuries and MBS are having an "inside day," meaning the entirety of the trading range is taking place inside the trading range from the previous session.  Pointing out inside days is a quick way for market participants to comment on the lack of volatility and momentum.

Treasuries were slightly (but inconsequentially) weaker overnight, resulting in a modestly weaker open for MBS as well.  Both quickly corrected into the domestic hours and have been holding in very slightly negative territory. 

Existing Home Sales came in quite a bit weaker than expected, but as a testament to just how broken financial markets can be around this time of year, bonds weakened slightly (the opposite of what they normally would do in response to weaker data).  The only other scheduled data is the 1pm 2yr Treasury Auction.  It's not expected to be a significant source of inspiration for bond markets.

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
101-02 : -0-02
FNMA 3.5
104-05 : +0-00
FNMA 4.0
106-18 : +0-01
Treasuries
2 YR
0.6590 : +0.0170
10 YR
2.1790 : +0.0190
30 YR
2.7740 : +0.0198
Pricing as of 12/22/14 11:57AMEST
Morning Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
9:37AM  :  Bond Markets Recovering After Modest Overnight Weakness
Live Chat Featured Comments
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Sung Kim  :  "and we wonder where all the FTHB went"
Matthew Graham  :  "here you go (re affordability): http://mbspric.es/1sQiO0Z"
Matthew Graham  :  "no question on wages not keeping pace. Not sure which measure of affordability to trust though."
Sung Kim  :  "anyone see a revised affordability index lately?"
Sung Kim  :  "real earnings have def not increased 5% for the median person"
Matthew Graham  :  "RTRS - US NOV NATIONAL MEDIAN PRICE FOR EXISTING HOMES $205,300, +5.0 PCT FROM NOV 2013"
Matthew Graham  :  "RTRS - US NOV INVENTORY OF HOMES FOR SALE 2.09 MLN UNITS, 5.1 MONTHS' WORTH"
Matthew Graham  :  "RTRS- US NOV EXISTING HOME SALES 4.93 MLN UNIT RATE, LOWEST SINCE MAY 2014 (CONSENSUS 5.20 MLN), VS OCT 5.25 MLN (PREV 5.26 MLN)-NAR"
Victor Burek  :  "I haven't seen that either"
Michael Ullmann  :  "Does fanni/fredddie allow this? I spoke with a borrower over the weekend who was pre approved by rbs and they claim that this was what they are letting them do"
Jason York  :  "only when they qualify with both payments, lol"
Sung Kim  :  "No"
Michael Ullmann  :  "Have you guys started seeing lenders that are allowing the dti to exclude a piti on a home that is on the market when buying up? Meaning no need to wait for the sale of the home to occur before closing?"
Jason York  :  "I recently had that scenario, veteran was 100% disabled, so he got disability, and his wife was his caregiver, so she received income for that, since he is 100% disabled, there was the continuance"
Sung Kim  :  " anyone know if VA caregiver stipend is eligible pay for VA loans?"