MBS Live: MBS RECAP
Open MBS Live Dashboard
FNMA 3.5
102-31 : +0-06
FNMA 4.0
105-05 : +0-04
FNMA 4.5
106-19 : +0-07
FNMA 5.0
108-00 : +0-04
GNMA 3.5
104-15 : +0-07
GNMA 4.0
107-12 : +0-08
GNMA 4.5
109-06 : +0-08
GNMA 5.0
111-01 : +0-08
FHLMC 3.5
102-25 : +0-07
FHLMC 4.0
104-30 : -0-01
FHLMC 4.5
106-03 : +0-05
FHLMC 5.0
107-14 : +0-01
Pricing as of 4:04 PM EST
Afternoon Market Updates
A recap of MBS Market Updates provided by MND Analysts and streamed live to the MBS Live Dashboard.
2:14PM  :  Fed Beige Book Released
2:02PM  :  ALERT: MBS Hit High Enough Levels For Positive Reprices
Most of the the would-be content for this alert was in the last one regarding auction results and 10's temporary indecision between 1.90 and 1.92. After a decidedly supportive bounce lower from 1.92, MBS have begun trending higher, currently at 103-01. This is enough for a positive reprice from a few of the characteristically early lenders, but it should be noted that ranges are fairly narrow and benchmarks haven't made any decisive move other than to hold their first test of 1.92 support. Even so, positive reprices are possible, but would be more widespread with more time at these levels or simply more gains.
1:21PM  :  ALERT: 10 Yr Auction Results: Another Strong Showing. Record Low Yields
Today's 10yr note auction stopped at a 1.90% high yield, which is quite a departure from the September's previous record holder at 2.00%. Despite that, and despite the rally heading into the auction, markets still beat the 1.91% when-issued yield (marking the 1:01:30 "when-issued" yield is analogous to the consensus on where the auction will stop). There was stronger than average demand as well, with 3.29 dollars bid for each dollar offered, a bit better than the 3.02 average for the last four re-openings.

Despite the strong results, bond markets have moved sideways to slightly weaker following the auction. This isn't the sort of weakness that has us expecting a reprice for the worse, merely a sort of acquiescence that the rally leading up to the auction did just about a perfect job of anticipating demand. 10's are currently doing a bit of their "which way do we go" shtick between 1.90 and 1.92 while Fannie 3.5 MBS wait for those cues before breaking more than a tick or two in either direction of 102-29. Significant technical support was seen this morning at 102-25+.

bottom line: things are pretty sideways for now, and that's impressive strength considering the pre-auction rally. We'll let you know if "sideways" changes.
11:53AM  :  Fed Research: Why Mortgage Refinancing Is Not a Zero-Sum Game
"In a recent speech, New York Fed President William Dudley called for actions “to see refinancing made broadly available on streamlined terms and with moderate fees to all prime conforming borrowers who are current on their payments.” This blog post explains how such a move could help stabilize the housing market and support economic growth. It also explains why mortgage refinancing is not—as some argue—a zero-sum game in which the benefits to one group are exactly offset by the costs to another.

Mortgage refinancing is one of the normal channels through which declining interest rates support economic activity, growth, and jobs. Falling mortgage rates reduce the amount of income households need to spend on servicing their home mortgages, freeing up cash flow for purchases of other goods and services...."
11:42AM  :  Treasuries Hitting Pre-Auction Resistance, MBS Hope For Support Bounce
As has been the case so many times of late, MBS are holding steady while benchmarks are trending. Fannie 3.5's are basically trading at opening levels while 10yr yields continue a 2-day downtrend. The discrepancies are very slight, but it was same yesterday: MBS honed in on opening levels from 2pm on while 10's improved slightly.

Yesterday looked as if it would favor the short end of the yield curve, and indeed it did, both heading into the open and briefly following the 3yr auction, but the longer end fought back to a pivot point around 171bps (between 10's and 2's) and is currently at 1.6968. But that flattening trend is now contending with some technical resistance in outright 10yr yields as well as a potential pre-auction concession.

The following MBS Commentary has a good look at the ongoing "triangle" in 10yr yields as well as a slick little video of a chart zooming in from a long term daily view of a trend channel in Fannie 3.5's to a short term view showing the same trendline, as well as some commentary on how we're approaching the trendline.
Featured Market Discussion
A recap of the featured comments from the Live Discussion on the MBS Live Dashboard.
Eric Franson  :  "REPRICE: 3:49 PM - Wells Fargo Better"
Kent Mikkola #353976  :  "Item 4 - http://www.fhaoutreach.gov/FHAHandbook/prod/infomap.asp?address=4155-1.2.B"
Jeff Statz  :  "michael, off the top of my head it was 3-4 units must have market rent or lease rent greater than or equal to PITIMI."
Michael Kelleher  :  "anyone know any way to get around the 15 year fha multi unit having to serve itself or at least know the exact rule"
MMNJ  :  "REPRICE: 3:13 PM - Provident Funding Better"
Eric Brennan  :  "REPRICE: 2:01 PM - Franklin American Better"
Matthew Graham  :  "I'm surprised at how well 10's continue to do ahead of the auction and somewhat concerned at this point about auction results if yields stay here. I don't think there would be a BTC issue, but possibly enough of a tail to cause some afternoon weakness. almost 2 hours to go though... Lots could still transpire in that time"
Matthew Graham  :  "RTRS- DEALERS SUBMITTED $5.36 BLN OF TREASURIES FOR CONSIDERATION IN FED PURCHASE -NY FED"
Matthew Graham  :  "RTRS- FED BOUGHT $2.25 BILLION OF TREASURIES MATURING BETWEEN FEB 2036 AND NOV 2041 -NY FED "