News & Analysis
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Demo based on market events from: Friday March 5, 2010
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MBS prices are down -8/32 (FNMA 30-yr 4.5 at 101.06), below 9:45 et pricing of -6/32. Unfavorable repricing took place. MBS prices fell to a low of -15/32 following the release of stronger than expected Employment data and then moved higher during the second half of the session. The Dow is up 120 points. For the week, MBS prices rose about 1/32.
The Economic Calendar will be very light next week. The Trade Balance will be released on Thursday. The big Retail Sales report will come out on Friday. Retail Sales account for about 70% of economic activity. Consumer Sentiment will also be released on Friday. In addition, there will be Treasury auctions on Tuesday, Wednesday, and Thursday. There were strong reactions to the last auctions for these securities. |
| FNMA (Mar) |
| 101.060 |
-0.080 |
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| 101.100 |
-0.080 |
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| 101.220 |
-0.080 |
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| 102.040 |
-0.040 |
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| 102.050 |
-0.040 |
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| 102.290 |
-0.040 |
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| FHLMC (Mar) |
| GNMA (Mar) |
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| MBS prices are down -9/32 (FNMA 30-yr 4.5 at 101.04), below 9:45 et pricing of -6/32, but well above the low for the day of -15/32. If you received pricing near the lows, then favorable repricing may be possible. |
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| MBS prices are down -11/32, below 9:45 et pricing of -6/32, but above the low for the day of -15/32. |
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| Unfavorable repricing is a risk. MBS prices are down -14/32 (FNMA 30-yr 4.5 at 101.00), below 9:45 et pricing of -6/32. Stronger than expected Employment data has hurt MBS markets. |
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MBS prices are down -6/32 (FNMA 30-yr 4.5 at 101.08), which is about 2/32 higher than yesterday at this time. Favorable repricing took place yesterday. The 30-yr fixed FNMA required net yield (60 day) is now at 4.71% from 4.73% yesterday. Early investors may have priced at lower levels.
Against a consensus forecast for a decline of -50K jobs, the economy lost -36K jobs in February, and the results from prior months were revised higher. The Unemployment Rate remained unchanged from January at 9.7%, which was lower than expected. The payrolls figures and the unemployment rate are calculated from two separate sets of data. The payrolls report focuses on larger companies, while the unemployment survey covers all companies. The unemployment survey showed an increase of 308K jobs in February, indicating that smaller companies were the source of significant job gains. Investors were surprised by the strength of today's data, and MBS markets fell after the news. The Dow is up 50 points. No more economic data will be released today. |
| FNMA (Mar) |
| 101.070 |
-0.070 |
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| 101.110 |
-0.070 |
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| 101.230 |
-0.070 |
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| 102.020 |
-0.060 |
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| 102.030 |
-0.060 |
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| 102.270 |
-0.060 |
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| FHLMC (Mar) |
| GNMA (Mar) |
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| MBS prices are down -8/32. The economy lost -36K jobs, which was close to expectations, but MBS markets fell sharply after the news. |
