Weekly Mortgage Overview: 2/9/2015

By February 9, 2015Mortgage Overview

MBS (Mortgage Backed Securities) Overview

This has been a very quiet day with zero economic data for MBS to react to. MBS started the day with a small rebound from Friday’s sell-off but that really fizzled and MBS are basically trading very close to Friday’s close.

Today there has only been geo-political news to digest with the G20 meeting and President Obama meeting with German Chancellor Merkel today over Ukraine.

Ukraine: President Obama gave a quick speech today and is in favor of providing lethal aid (i.e., sending them a bunch of free killing toys at your expense) but is not ready to do it yet as Merkel is still brokering a peace arrangement between Russia and Ukraine.

Greece is the word: “There is no way out” for Greece from its treaty obligations, warns German lawmaker Michael Fuchs (Angela Merkel’s deputy caucus chairman), telling Bloomberg TV that conditions set for Greece by the Troika (EU, ECB, IMF) for bailout funds “have to be fulfilled…That’s it, very simple.” The Greeks remain adamant that they will not ask for an extension to the bailout mechanism. Then German Finance Minister Wolfgang Schaeuble exclaimed at the G20 meeting that “Greece either has to find a way to get bridge financing, or, if they want to do it with us, they need a program,” seeming to push the door open to possible Russian financial aid for Greece as Europe’s pivot to Putin appears to be rising. 

Tomorrow will be the first of three days of Treasury auctions with the 3-year note, but the biggest event will be the release of the Wholesale Inventories. The stronger this report is, the worse it is for rates.