Calmly Holding in Super Strong Territory

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