MBS may not be quite as high as they were yesterday, but in the bigger picture, today’s levels are right in line with the best we’ve seen in more than 3 years. More importantly, mortgage rates are verifiably at the best levels in more than 3 years. There was no major volatility or any remarkable econ data. Tomorrow’s calendar is similarly quiet. Stock/bond correlations broke down in the afternoon, but as bonds search for any sources of guidance, that correlation could certainly return if stocks are making bigger moves.
Econ Data / Events
ADP Weekly Payrolls
12.75k vs 10.25k prev
Case Shiller Home Prices-20 y/y (Dec)
1.4% vs 1.4% f’cast, 1.4% prev
CaseShiller 20 mm nsa (Dec)
-0.1% vs — f’cast, 0% prev
FHFA Home Price Index m/m (Dec)
0.1% vs 0.3% f’cast, 0.6% prev
FHFA Home Prices y/y (Dec)
1.8% vs — f’cast, 1.9% prev
Consumer Confidence
91.2 vs 87.0 f’cast, 89.0 prev
Market Movement Recap
08:57 AM Mostly flat overnight and not much movement so far. MBS down 1 tick (.03) and 10yr up 0.8bps at 4.04
01:49 PM Modest recover after AM weakness. MBS down 1 tick (.03) again after being down 3 ticks (.09) at 10am. 10yr down 0.3bps at 4.030
03:47 PM Losing ground modestly into PM. MBS down 2 ticks (.06) and 10yr up half a bp at 4.038