MBS MORNING: Charts, Scheduled Data, And Other Considerations

Here is a quick look back at the Friday afternoon trading plus this AM for MBS, treasuries, and Stocks:

After a fairly busy week last week, this week slows down quite a bit, today being indicative of that with only some Fed-Speak by Dr. Ben himself.  Other items of note are MBA purchase applications on Wednesday followed by Retail Sales and business Inventories.   The standard Thursday fare of jobless claims is nestled between PPI and CPI inflation data, the latter arriving Friday morning concomitantly with Empire State Manufacturing Survey.  Friday also brings industrial production and Treasury International Capital.

Perhaps more important than data at the moment are "flow" considerations as today is the first real day of Class A settlement wherein Fannie and Freddie 30 yr fixed MBS are delivered from seller to buyer and June MBS take over as the "on the run" issuance.  This AM's rally is more or less offset by the drop in price from May to June coupons, leaving us basically where we ended on Friday which is still right around our long term internal trendline.  If we can close above this today, it would be a "FAILED RETEST" from a technical analysis perspective, which we can discuss in greater detail later today.  In this case, that would be the kind of failure we like!

Keep in mind that because of the settlement, things tend to be a little slower in terms of volume, so fewer trades can create more volatility if they vary greatly from current price levels.  We'll let you know if we see appreciable movement in what should be a relatively quiet and lackluster start to the day.