MBS MID-DAY: More Gains After More Negative Data

By: Matthew Graham

Bond markets' willingness to accept guidance from economic data is in full swing.  As discussed in the Day Ahead, this morning offered several more opportunities to demonstrate that willingness.  This resulted in a rather logical rally following generally downbeat data.

NY Fed's Empire State Manufacturing was the most downbeat of the bunch, coming in at -1.19 vs +7.0 forecast.  45 minutes later, the Industrial Production numbers dropped -0.6 vs -0.3 forecast.  In both cases, the internal components were weak.  The only compelling counterpoint was the slide in Industrial Production was largely related to a decline in energy production versus the much colder month of February. 

Bond markets weren't too concerned with those counterpoints as they rallied steadily into the NYSE open.  They've been holding those moderate gains ever since.  If anything, they're favoring the stronger levels of the day (10yr yields in the 1.87's), but haven't yet moved to test the important inflection zone from 1.84-1.86.  Breaking that range would be a sign of firmer commitment, and it could require a fresh supply of weak data over the next few days.


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
102-20 : +0-04
FNMA 3.5
105-08 : +0-03
FNMA 4.0
106-29 : +0-01
Treasuries
2 YR
0.5000 : -0.0160
10 YR
1.8760 : -0.0240
30 YR
2.5230 : -0.0200
Pricing as of 4/15/15 12:59PMEST

Morning Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
9:40AM  :  Bonds Trading on Data and That's a Good Thing Today

Live Chat Featured Comments
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "RTRS- NAHB APRIL INDEX OF HOME SALES OVER NEXT SIX MONTHS 64 VERSUS 59 IN MARCH"
Matthew Graham  :  "RTRS- U.S. APRIL NAHB HOUSING MARKET INDEX 56 (CONSENSUS 55) VERSUS REVISED 52 IN MARCH"
Victor Burek  :  "probably not enough to get us through 1.84"
Matthew Graham  :  "RTRS- U.S. MARCH CAPACITY USE RATE 78.4 PCT (CONS 78.7 PCT) VS FEB 79.0 PCT (PREV 78.9 PCT)"
Matthew Graham  :  "RTRS - U.S. MARCH INDUSTRIAL OUTPUT -0.6 PCT (CONSENSUS -0.3 PCT) VS FEB +0.1 PCT (PREV +0.1 PCT)"
Victor Burek  :  "another huge miss"
Matthew Graham  :  "RTRS- NY FED'S EMPIRE STATE BUSINESS CONDITIONS INDEX -1.19 IN APRIL (CONSENSUS +7.0) VS +6.90 IN MARCH"