MBS RECAP: Uneventful Day Leaves Bond Markets Fairly Flat; MBS Underperform

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As the last few trades of the day trickle in, MBS are set to close almost perfectly in line with yesterday's closing levels.  Even before that, there hasn't been much movement to speak of. 

The hand-off from European trading was slightly negative this morning, but both MBS and Treasuries stayed inside yesterday's weakest levels.  Producer Prices came in "healthy," and while some credited that data for additional weakness in the morning, I'm not seeing it.  Bonds were already on an upswing and we're talking about 2.560 to 2.567 in 10yr yields.

It's a bit easier to make a case for weaker Industrial Production at 9:15am as a modest benefot to bond markets.  More than anything though, slumping stocks and 'asset allocation' flows (money managers selling stocks to buy bonds) helped keep the range contained for MBS.

Despite the contained range, however, MBS struggled a bit compared to Treasuries.  10yr yields are near their best 2-day levels while MBS are roughly in the middle of theirs.  That underperformance has been a fairly consistent theme for nearly 2 weeks now.

Yellen's second day of congressional testimony provided nothing more than a few good laughs.  There were no noticeable market reactions.  The calendar provides a bit more to go on tomorrow with Jobless Claims, Housing Starts, and Philly Fed.

Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live. Pricing as of 7/16/14 4:42PMEST Today's Reprice Alerts and Updates 11:10AM  :  Back to Unchanged Levels as Stocks Slide 9:05AM  :  Bond Markets Slightly Weaker After Neutral Overnight Session Nathan Miller  :  "thx rob, it is, do you know their down pmt requirement on a purch off hand?" robert clark  :  "NMSI if the loan amount is higher than $417,000" Nathan Miller  :  "outside of the hard money lenders, anyone know a stated income lender for a deal in CA? self emp brwr." William Hansen  :  "10 yr Green 3.5 FNMA Red. Hopefully FNMA turns. " Discuss the MBS and Mortgage Markets on Our Streaming Dashboard

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MBS MID-DAY: Giving Back Some Gains; Mostly Uneventful; Some Reprice Risk

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Sometimes the 2nd day of a big geopolitical move will spiral into a volatile blaze of glory.  Other times, it's like today.

Bond markets are calmly marching to slightly weaker levels.  The same narrow trend has been intact all morning.  It began PERFECTLY in line with the 8:20am bond market "pit" open.  It was reinvigorated by stock market strength.  Global markets are simply trading in a "risk-on" direction (stock prices and bond yields higher) after yesterday's big "risk-off" move.

As expected, the recent underperformance of MBS is allowing them to stand stronger in the face of broader bond market weakness this morning.  For instance, MBS have given up just UNDER half of yesterday's gains while Treasuries have given up just OVER half of theirs.

Overnight, Treasuries were more volatile.  10yr yields made highs at 2.494.  10's are currently at 2.4836.  We'll be watching to see what happens if they make it back to that overnight high (also yesterday morning's low).  On a break higher, the next technical target would be 2.51.  More importantly, it would likely push MBS into widespread reprice risk territory.

Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.Pricing as of 7/18/14 12:12PMEST Morning Reprice Alerts and Updates 11:21AM  :  ALERT ISSUED: On Shaky Ground; Negative Reprice Risk Looming 9:03AM  :  Bond Markets Weaker Overnight; Bouncing Back Into Domestic Session Josh Olson  :  "DC: Fannie Mae MRI guide states no more than 10%" Brent Borcherding  :  "JO, is there a specified reason the group owns the 30%. We have an investment condo in Chicago that the builder was required to keep 30% for rentals in a redeveloping neighborhood, it was part of the agreement with the city. Fannie approves the condos, on a case by case basis, if documented." Dan Clifton  :  "josh that should be fairly easy. at 80% you need a full review which is appraisal, condo questionnaire, budget, condo docs insurance, the max number of investment units is 49% on conventional for exisiting complexes" Joseph Moran  :  "first rate sheet of the day. basically no change" Josh Olson  :  "UW question: Condo purchase, Conv financing, 80% LTV, 808 credit, 183 units BUT 30% owned by investment group. Who will finance this loan?" John Tassios  :  "I agree with MG's post. today you will have buying today ahead of the weekend for safety. But, next week could be a snap back selloff too." Discuss the MBS and Mortgage Markets on Our Streaming Dashboard

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MBS RECAP: Uneventful Day Leaves Bond Markets Fairly Flat; MBS Underperform

AppId is over the quota
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Gain access to the most accurate real-time back month TBA indications from Thomson Reuters and Tradeweb. LEARN MORE MBS RECAP: Uneventful Day Leaves Bond Markets Fairly Flat; MBS Underperform

As the last few trades of the day trickle in, MBS are set to close almost perfectly in line with yesterday's closing levels.  Even before that, there hasn't been much movement to speak of. 

The hand-off from European trading was slightly negative this morning, but both MBS and Treasuries stayed inside yesterday's weakest levels.  Producer Prices came in "healthy," and while some credited that data for additional weakness in the morning, I'm not seeing it.  Bonds were already on an upswing and we're talking about 2.560 to 2.567 in 10yr yields.

It's a bit easier to make a case for weaker Industrial Production at 9:15am as a modest benefot to bond markets.  More than anything though, slumping stocks and 'asset allocation' flows (money managers selling stocks to buy bonds) helped keep the range contained for MBS.

Despite the contained range, however, MBS struggled a bit compared to Treasuries.  10yr yields are near their best 2-day levels while MBS are roughly in the middle of theirs.  That underperformance has been a fairly consistent theme for nearly 2 weeks now.

Yellen's second day of congressional testimony provided nothing more than a few good laughs.  There were no noticeable market reactions.  The calendar provides a bit more to go on tomorrow with Jobless Claims, Housing Starts, and Philly Fed.

Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live. Pricing as of 7/16/14 4:42PMEST Today's Reprice Alerts and Updates 11:10AM  :  Back to Unchanged Levels as Stocks Slide 9:05AM  :  Bond Markets Slightly Weaker After Neutral Overnight Session Nathan Miller  :  "thx rob, it is, do you know their down pmt requirement on a purch off hand?" robert clark  :  "NMSI if the loan amount is higher than $417,000" Nathan Miller  :  "outside of the hard money lenders, anyone know a stated income lender for a deal in CA? self emp brwr." William Hansen  :  "10 yr Green 3.5 FNMA Red. Hopefully FNMA turns. " Discuss the MBS and Mortgage Markets on Our Streaming Dashboard

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