MBS RECAP: Range Grows Even More Narrow; Bonds End Near Best Levels

By: Matthew Graham •

Today was a classic "inside day," meaning that the entire range of trading took place inside yesterday's trading range.  As far as domestic hours are concerned, it wasn't even close.  10yr yields continued holding the 2.13-2.20 range (doesn't include the run above 2.20 that occurred after the 3pm close yesterday) and Fannie 3.5s held well within their 103-20 - 104-00 range (tested the lower boundary yesterday afternoon).

The inside day is an understandable byproduct of a market that remains open to moving in either direction depending on some future trigger.  In the current case, it's infinitely possible that the trigger will be economic data.  It would be no surprise that we didn't see things get too crazy today considering economic data wasn't too inspiring, for better or worse. 

Despite the fact that ISM Manufacturing is a very capable market mover, today's didn't have much of an effect after coming in at 51.1 vs 52.6 forecast.  Afternoon comments from Boston Fed Pres. Rosengren helped the entire yield curve end the day closer to stronger recent levels.  Rosengren said the Fed could hit near-zero rates with more frequency in the future, given the global growth outlook.  He also said the absence of success on the Fed's inflation mandate is one reason to keep rates fairly low and that China/Europe/Japan weakness could all contribute to further disinflation.

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
100-23 : +0-11
FNMA 3.5
103-28 : +0-10
FNMA 4.0
106-13 : +0-07
Treasuries
2 YR
0.7120 : -0.0270
10 YR
2.1600 : -0.0540
30 YR
2.9190 : -0.0413
Pricing as of 9/1/15 6:34PMEST
Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
9:44AM  :  ALERT ISSUED: Unfortunately, There is Already a Modest Amount of Reprice Risk
8:59AM  :  More on Overnight Weakness In Asia (It Wasn't Just China...)
MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "so clearly, I can't choose the cup in front of you."
Matthew Graham  :  "I mean stocks were 200 points lower in the S&P when 10yr yields were 3%"
Matthew Graham  :  "why weren't you as incredulous about the bigger-picture divergence staring in early 2014?"
Jeff Anderson  :  "Was thinking the same. Not like we had rallied hard for a few days prior ot this, also, but under 2.20 still, so we'll see, I guess."
Sung Kim  :  "Saw it last week Bryce. It was very disconcerting to me last tue "
Bryce Schetselaar  :  "crazy that the market is down 400 pts and bonds are aren't doing better. "
Guy McAtee  :  "Most Solar Contracts have UCC filings. You should be able to find the associated filings and then contact solar company. Have done this with Solar City and Vivint in AZ."
Frank Hanna  :  "fnma purchase. UW is calling for info regarding if solar panels are leased or owned. sale is bank owned so info isn't readily available. home has access to standard utilites.Is this a condition worth fighting over?"