MBS RECAP: Bonds Erase Majority of Losses, but Can't Get Past Friday's Highs

By: Matthew Graham •

At one point, today looked like it could be nearly as anticlimactic for bond markets as 2nd goal for the--well... never mind.  Nothing is that anticlimactic.  And fortunately, Treasuries and MBS ended up bouncing back before things got too depressing.

The overnight session began with mixed-to-slightly-stronger global economic data.  Treasuries pulled back as equities rallied.  The absence of last week's 'month-end' buying also seemed to be taking a toll in terms of drying up the innately supportive momentum seen on Friday.

Risk of anticlimactic disappointment peaked after the Incomes and Outlays data.  Although spending was weaker than expected, Income was stronger, and wage growth is a big deal right now.  Treasuries and MBS moved to the weakest levels of the day but bounced back as cash trading opened for stocks.  Gains continued after weaker ISM Manufacturing data and leveled off shortly thereafter.  The afternoon tone could be taken positively in that good technical support of 1.70 held up in 10yr yields, or negatively in the sense that bonds seemed to run into resistance at Friday's best levels.

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
103-14 : -0-02
FNMA 3.5
105-22 : -0-01
FNMA 4.0
107-05 : +0-01
Treasuries
2 YR
0.4680 : +0.0153
10 YR
1.6740 : +0.0350
30 YR
2.2570 : +0.0341
Pricing as of 2/2/15 5:07PMEST
Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
9:17AM  :  ALERT ISSUED: Bond Markets on the Run after Decent European Data and Month-End Reversal
MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Ira Selwin  :  "investor removal of overlays as well BB"
Brent Borcherding  :  "3% down available again isn't easing? Reduction in MIP for FHA isn't easing?"
Jeff Anderson  :  "Did he give a time table on the easing?"
Matthew Graham  :  "RTRS - FED SURVEY SAYS SEVERAL LARGE BANKS EASING LENDING STANDARDS FOR RESIDENTIAL MORTGAGE LOANS"
Gary Bracht  :  "would have thought we'd have a reprice for the better by now..."
Victor Burek  :  "only VA"
Thomas Counsell  :  "Any options available for borrowers that had a short sale more than 2 years ago, but less than 3?"
Brent Borcherding  :  "I don't think Brokers were ever allowed to charge that separately, once comp rules were enforced."
Anthony Sanchez  :  "Did the CFPB come out with some new regulation regarding third party processing, no longer allowing brokers to have this charged separately from comp?"