So we picked up the rocks and moved them to the other side of the room today. Tomorrow we’ll probably just move the rocks back to the other side of the room. Or maybe over by the window. I guess the question is....What happens tomorrow when DC & NY get plugged back in? Gotta confirm today's rally! That's what! The range is still the range until it ain't the range no more.
On the topic of weather...
In the DC/BALTIMORE metro, Pepco, BGE and Dominion Virginia report more power outages produced in one night of “thundersnow” than two blizzards combined were able to produce in Feb. 2010. Those we’re two-doozy’s if I may say. The snow was fast and furious last night. I hear people were stranded on the Beltway. Some folks abandoned their vehicle and used their DroidX to locate the nearest liquor store/bar (DroidX better than iPhone btw. IMO). No worries. The snow didn't seem to matter too much today. Trading volumes picked up in the “rate sheet influential” portion of the yield curve and 10yr contract flows were +$5mln day over day. That’s encouraging I suppose. Oh wait wait wait.... I’m reminded of the madness that has become moving rocks from one side of the room to the other. I think im suffering from range exhaustion.....
Lender pricing improved moderately following afternoon reprices for the better. 4.75 is still expensive on the C30 buydown. 4.875 has more than enough room to play with margins as needed.
CC MBS: -1.1BPS to 4.157%. +76/10TSY, +67/10IRS, +216/5TSY. I extended as the curve steepened yesterday. Still rich on relative value basis (BIG PICTURE). Then again “lower and wider” , “higher and tighter” is not an uncommon occurrence over these last 5-weeks.
FNCL 4.5 MBS prices continue to consolidate within the recent range. Overhead resistance is strong here, not in that FNCL 4.5s will find it difficult to break back into the 103 handle.....overhead resistance is strong because we need to see a move "down in coupon" to FNCL 4.0s for mortgage rates to really make notable gains. It will take a stable commitment from MBS investors for FNCL 4.0s to become the new production coupon. On the flip side, it only takes two or three bad days to see 5.0 trades being filled by loan originators. Not sure how much loan supply there'd be though....
The long slog continues....
MBS Market Alerts
