MBS MID-DAY: Bonds Remain in June's Range After Nice Boost From Greece

By: Matthew Graham •

Treasuries have safe haven appeal on a global scale.  This is frequently seen when Asian markets are open for the first few hours of each trading day before European markets open.  During that time, Treasuries are one of the most logical assets in the search to avoid risk--especially when the risk is focused on Europe.  As such, it's not uncommon for overnight (and especially "over-the-weekend") events to have their biggest impact on domestic rates before 3am.

This was the case today as 10yr yields opened at 2.274 and traded mostly under 2.30 before Europe cam on line for the day.  From that point on, rates drifted gently higher, despite remaining in positive territory day-over-day.  By the start of the domestic session, 10yr yields were just over 2.30 and MBS opened just over a quarter point better on the day. Stronger ISM data and early stock market gains made for some mid-morning weakness, but it's leveled off since 11am.

In the bigger picture, rates remain well-within June's range.  Greek drama effectively provided a boost for bonds within that range, but so far, nothing more.

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
99-19 : +0-12
FNMA 3.5
103-02 : +0-09
FNMA 4.0
105-30 : +0-07
Treasuries
2 YR
0.5970 : -0.0360
10 YR
2.3170 : -0.0689
30 YR
3.1100 : -0.0798
Pricing as of 7/6/15 12:36PMEST
Morning Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
10:18AM  :  ALERT ISSUED: Negative Reprice Risk Already a Consideration
9:58AM  :  Bond Markets Mostly Holding Post-Referendum Gains; Waiting on ISM
Live Chat Featured Comments
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
John Tassios  :  "headline looked decent, but internals looked a bit worse"
Matthew Graham  :  "RTRS- ISM NON-MANUFACTURING PRICES PAID INDEX 53.0 IN JUNE VS 55.9 IN MAY"
Matthew Graham  :  "RTRS- ISM NON-MANUFACTURING BUSINESS ACTIVITY INDEX 61.5 IN JUNE (CONSENSUS 60.0) VS 59.5 IN MAY"
Matthew Graham  :  "RTRS- ISM REPORT ON U.S. NON-MANUFACTURING SECTOR SHOWS PMI 56.0 IN JUNE (CONSENSUS 56.2) VS 55.7 IN MAY"
Scott Valins  :  "Fannie is ok with that BM. Freddie requires landlord experience."
Brian McFarlane  :  "have a borrower purchasing 1st investment property...I seem to recall that if you are purchasing 1st investment property, you can use the rent schedule off of the appraisal for income with the usual vacancy factor, even though you do not have property management experience. Am I off my rocker, or thinking of a guideline that no longer exists?"