MBS RECAP: 12/30/2011


This year essentially marked the birth and infancy of the MBS Live product. What an honor it’s been to be a part of this community!

Bond trading in 2011 is now officially over and next week, although not beginning until Tuesday the 3rd, will otherwise waste no time in ringing in the new year as it boasts both ISM Manufacturing and FOMC Minutes. There are no Treasury Note auctions next week, but Friday brings the Employment Situation Report–the first one we’ve had since the marked turn for the better in weekly Jobless Claims. It will be a good acid test as to how much impact markets perceive from domestic data vs European undercurrents in the new year.

As has been mentioned in the live chart on the dashboard (for any of our mobile audience that may have missed it), beware the “pipeline control” reprices for the worse not only this afternoon with rates/fees basically at their all-time best levels, but also into the new year as trading volume and lock volume are likely to pick back up. The potentially negative scenario would be to see the world wake up next Tuesday and think “oh yeah! I forgot NFP was coming up this Friday, so maybe I’ll start building in a bit of a concession.”

That sort of speculation is a bit out of our comfort zone, but just something to keep in mind amid what seems like an endless sea of MBS Positivity. Speaking of that, make sure to check out the latest MBS Commentary for some long term charts/thoughts on 2011 and musings about how the spread situation could play out into 2012 (linked below). Otherwise, THANK YOU for an awesome 2011 and from the MND Family to yours, we hope 2012 is even better. Happy New Year!

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