MBS RECAP: 1/9/2012

There’s really not much going on to drive the price swings this afternoon apart from light liquidity and low volume. All across the board, markets are ticking with about half their normal volume and frequency. 10yr futures just now cracked 500k contracts on the day after seeing well over a million on Friday and even broke into 7 figures on Thursday as well.

A case could be made for technical selling in benchmarks (pulling MBS down with them), stock lever connection, pre-auction concession heading into the rest of the week, or some combination of the above. but all carry the caveat that the low volume looks to have exaggerated the moves and that no major technical levels have been crossed. Just an uneventful afternoon with a bit of selling pressure in bond markets that now looks to be stabilizing for now.
Consumer Credit crushing consensus estimates turned out to be non-event for bond markets. Consumer Credit! You’re on notice! Next time you offer a big beat/miss and markets don’t respond, we won’t be watching you next time!

Article source: http://www.mortgagenewsdaily.com/mortgage_rates/blog/242499.aspx

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