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Market Update: Friday, February 17, 2012

February 20, 2012

Today’s Market

Thursday 02-16-12

Friday February 17, 2012

Monday 02-20-12

 

Afternoon Analysis: 02-17-12 04:00pm

MBS prices are down -3/32 (FNMA 30-yr 3.5 at 103.09), about 2/32 above morning pricing, and up from a midday low of -7/32. Investors were mostly looking ahead to Monday’s meeting about a Greek bailout. Core CPI inflation rose to the highest annual rate since September 2008. Leading Indicators came in close to expectations. The Dow is up 50 points. For the week, MBS prices fell about 9/32.

Monday’s meeting between Greek and euro zone officials will be the most highly anticipated economic event next week. Investors expect that a deal will be reached to provide additional aid to Greece. It will be a light week for US economic data. Existing Home Sales will be released on Wednesday. New Home Sales and Consumer Sentiment will come out on Friday. In addition, there will be Treasury auctions on Tuesday, Wednesday, and Thursday. Mortgage markets will be closed on Monday in observance of Presidents Day, meaning that Greek news may lead to a big change when MBS markets open on Tuesday.

02-17-12 04:00pm

30yr 3.5

15yr 3.0

FNMA

103.09+

-0.03+

103.01+

-0.01+

104.24+

-0.03+

103.24+

-0.00+

103.18+

-0.01+

105.08+

-0.03+

FHLMC

GNMA

 

Update: 02-17-12 02:03pm

MBS are down -5/32, very close to morning levels. The Dow is up 40 points.

Update: 02-17-12 11:57am

MBS are down -3/32, about 2/32 above morning levels. Leading Indicators came in close to expectations.

 

Morning Analysis: 02-17-12 09:45am

MBS prices are down -5/32 (FNMA 30-yr 3.5 at 103.08), which is about 10/32 lower than yesterday at this time. Unfavorable repricing was seen yesterday. The 30-yr fixed FNMA required net yield (60 day) is now at 3.45%, from 3.34% yesterday.

Increased optimism that Greece will reach an agreement on Monday for a bailout package has pushed MBS markets lower again today, as investors partially reverse the flight to safety. Comments from ECB and euro zone officials indicate broad support for Greece to receive additional aid. January CPI rose 0.2% from December, below the consensus of 0.3%, and was 2.9% higher than one year ago. Core CPI also rose 0.2%, above the consensus of 0.1%, and was 2.3% higher than one year ago. The Dow is up 30 points. Leading Indicators will be released at 10:00 et.

02-17-12 09:45am

30yr 3.5

15yr 3.0

FNMA

103.080

-0.050

102.310

-0.040

104.250

-0.030

103.230

-0.020

103.170

-0.030

105.070

-0.050

FHLMC

GNMA

 

Update: 02-17-12 08:38am

MBS are down -6/32. The CPI inflation data was mixed and had little immediate impact.

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