MBS Live: MBS Afternoon Market Summary
Today saw the passage of the House bill to extend the Debt Ceiling deadline, which moves on to a Senate that's already indicated they'll send it to the President (who in turn says he'll sign it).  Everything seems to be shockingly smooth and drama-free in terms of economic politics, and markets seem to have done a shockingly good job of pricing all of this in to recent trading levels.  The fact that we scarcely budged today combined with the volume spikes surround last week's Thursday morning data seem to suggest that we shift focus to relevant economic reports so as to better divine the Fed's probable stance on easing in 2013.  With no economic data of gross importance today (just FHFA Home Prices, which came in as-expected) MBS held between 104-09 and 104-11.  Treasuries edged slightly higher in yield throughout the day, but dropped enough at the open that they're still in positive territory vs yesterday.  10yr Treasuries actually had their second best close of the year.  MBS cannot say the same and continue to struggle relative to benchmarks.
MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
FNMA 3.0
104-11 : +0-05
FNMA 3.5
106-03 : +0-03
FNMA 4.0
106-22 : +0-02
FNMA 4.5
107-20 : -0-01
GNMA 3.0
105-11 : +0-05
GNMA 3.5
108-02 : +0-02
GNMA 4.0
109-07 : +0-03
GNMA 4.5
109-08 : +0-01
FHLMC 3.0
103-31 : +0-04
FHLMC 3.5
105-27 : +0-02
FHLMC 4.0
106-11 : +0-03
FHLMC 4.5
106-21 : -0-04
Pricing as of 4:04 PM EST
Afternoon Reprice Alerts and Updates
Below is a recap of instant Reprice Alerts and updates issued via email and text alert to MBS Live subscribers this afternoon.
1:32PM  :  Bonds Fall On Debt-Ceiling News. Reprice Risk At Bay For Now
The prospects for negative reprices have increased only slightly in the past half hour, but have increased just the same. Treasuries were already heading higher in yield coming out of the daily round of Fed QE4 purchases from 10:15 to 11:00 with the latest motivation for weakness attributed to news that the House has passed the Debt Ceiling deadline bill.

Most of this was already priced into the market, but we have seen yields move up just slightly above their previous highs of the session, currently 1.8347. Fannie 3.0s have fell from 104-13 to 104-09, but look to be attempting to hold their ground at 104-10 currently.

All in all, this hasn't been a swift sell-off by any means, and MBS remain 5 ticks improved vs yesterday, but still merits a "heads up" that prices now match the lows seen just after 9:30am. This isn't enough movement for a negative reprice in and of itself, but it does take a few steps toward introducing that risk. As always, some lenders may be more jumpy about such things than others, but holding above 104-09 should keep reprice risks subdued for now. We'll reassess if we break lower.
Live Chat Featured Comments
A recap of the featured comments from the MBS Live Dashboard's Live Chat feature, utilized by hundreds of industry professionals each day.
Rob Clark  :  "REPRICE: 3:50 PM - Provident Funding Worse"
Ted Rood  :  "Kinda like dribbling in soccer."
Gus Floropoulos  :  "we would like to punt it 500 yards, not chip it for 20"
Ira Selwin  :  "translation - we would like to kick the can a long time, but will still be fine with small kicks."
Matthew Graham  :  "(same thing Carney said y'day)"
Matthew Graham  :  "RTRS - WHITE HOUSE SAYS WOULD PREFER U.S. DEBT CEILING TO BE RAISED FOR A LONG PERIOD OF TIME, BUT WELCOMES PASSAGE OF SHORT TERM EXTENSION BY HOUSE OF REPRESENTATIVES "
Peter Gladkin  :  "fair enough... brick by brick I suppose"
Victor Burek  :  "i agree Peter..but it is a start"
Peter Gladkin  :  "Victor, but let's be honest cutting 100 billion each year for 10 years is hardly a cut... point in fact our projected spending increases are larger than that. I personally think we should cut all foreign aid which would save is 51.6 billion in 2013 alone... and make foreign aid illegal to provide unless we are running a surplus. Borrowing money to give it away makes no sense at all."
Brent Borcherding  :  "Bryce, CMG"
Jeff Weaver  :  "Mid Island. Did one about a month ago"
Bryce Schetselaar  :  "Does anyone know what lenders can do FHA streamlines on NOO?"
Victor Burek  :  "and the can is kicked"
Matthew Graham  :  "RTRS- U.S. HOUSE OF REPRESENTATIVES PASSES EXTENSION OF U.S. DEBT LIMIT TO MAY 19, MEASURE MOVES TO SENATE "
Thomas Nelson  :  "Thanks guys.........problem is, lender says "borrower can pay them, we just won't count it towards prepaids because they aren't due" It's insanity."
Ted Rood  :  "Seems like a bit of a net benefit issue"
Dirk Postupack  :  "TN....just ran across that in Pa......they were required to be paid. Bank wants to make sure all taxes were up to date at settlement, as we all know that taxes are a leinable item. The lenders stand on that was " who is to say that he is going to pay them at that point.""
Scott Valins  :  "TN get a letter from title rep saying they want to collect the taxes now"
Thomas Nelson  :  "Anybody ever come across this problem?............Our owner is doing a consumer paid transaction in Wisconsin. The customer paid half their taxes in December and the other half were going to be added to the HUD on Friday. Lender says they don't count towards "prepaids" because they aren't due until July. Taxes are due at the end of January in Wisconsin but you do have the option of paying the other half in July if you pay the installment plan. Customer did not want "installment plan", just w"
Matthew Graham  :  "RTRS - REID SAYS SENATE WILL WORK ON A FISCAL 2014 BUDGET BLUEPRINT THIS YEAR"
Matthew Graham  :  "RTRS- US SENATE MAJORITY LEADER REID SAYS SENATE WILL TAKE UP REPUBLICAN DEBT LIMIT BILL IF HOUSE PASSES IT "
Matthew Graham  :  "both sides have been so amicable, it feels like a trap."
Matthew Graham  :  "more cats and dogs living together: RTRS- US SENATE DEMOCRATIC LEADERS PRAISE HOUSE REPUBLICAN TEMPORARY DEBT LIMIT PLAN FOR NOT LINKING IT TO SPENDING CUTS "
Matthew Graham  :  "In other news, the House got through their procedural rule vote (voting to send it to a vote?) on the debt ceiling bill 234-190"
Melissa Sawyer  :  "All I know is my lender credit is the best it's been since Jan 2 and covers almost all my closing costs. Locking today. Feels good."
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