MBS Live: MBS Afternoon Market Summary
MBS prices fell all the way to early Friday morning levels this afternoon as an average Monday morning got sloppy as the day progressed. The volume during the first few hours of the domestic session was surprisingly solid for a Monday and that could have played into some of the afternoon volatility, combined of course, with the impending roll tomorrow afternoon (monthly coupon settlement for Fannie/Freddie 30yr Fixed MBS). There was little, if anything, by way of relevant market-moving considerations and markets were left to simply "trade it out" following last week's mad dash lower in yield (or longer in duration, or higher in MBS price, etc...). The silver lining around this afternoon's weakness is that if we had to pick an aggressive rally target at the beginning of last week, it would be precisely here (in terms of 10yr yields) at 1.74+.
MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
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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.
3:31PM :
ALERT ISSUED:
Widespread Negative Reprices As MBS Approach Friday AM Levels
What had been a more MBS-specific problem is now exacerbated by rising Treasury yields. 10's just hit 1.74% for the first time since before Friday's NFP results. Fannie 3.0s have ratcheted down another 3 ticks and are now only a few ticks higher than Friday's pre-NFP levels, currently 9 lower on the day at 104-02. If you haven't yet seen a negative reprice, you probably will--in some cases, for the 2nd time.
1:56PM :
ALERT ISSUED:
Stocks and Yields Higher, MBS Lower, More Reprice Risk
The reprice risk situation has deteriorated incrementally with Fannie 3.0s hitting session lows at 103-05. Stock prices rose somewhat abruptly in the past 10 minutes and Treasury yields followed (though the stock lever in general hasn't been highly connected). Even so, whereas there was "some" reprice risk earlier after the first alert, there's "more" now, and the first few have already hit. This isn't an armageddon situation for MBS, but we'll probably see a few more reprices. We'll let you know if things deteriorate further.
1:01PM :
ALERT ISSUED:
Negative Reprice Risk Makes Debut As Liquidity Takes Toll
What had been a sideways grind for MBS into the noon hour has turned into a downtrend. Fannie 3.0s are now down 4 ticks at 104-07 and are far enough from levels that prevailed when some lenders were out with their first rate sheets of the day. Negative reprices are becoming a possibility for those lenders, and possibly others (due to the trend).
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.
Bill Laffey : "REPRICE: 3:20 PM - Fifth Third Mortgage Worse"
Al Bordessa : "REPRICE: 3:17 PM - Stearns Lending Worse"
Justin Dudek : "REPRICE: 3:01 PM - Everett Financial Worse"
Steve Chizmadia : "REPRICE: 2:57 PM - Pinnacle Worse"
Eric Franson : "REPRICE: 2:35 PM - Wells Fargo Worse"
Bryce Schetselaar : "Thank you MBS. Locked in just before the RP"
Jason York : "REPRICE: 2:30 PM - Plaza Worse"
Rob Clark : "REPRICE: 2:21 PM - Provident Funding Worse"
Tom Schwab : "REPRICE: 2:07 PM - Franklin American Worse"
Tom Schwab : "REPRICE: 1:54 PM - 360 Mortgage Worse"
Tom Schwab : "REPRICE: 1:53 PM - AMC Worse"
Matt Hodges : "lock em if you got em"
Jeff Anderson : "We have supply coming to market this week also, 3's,10's and 30's, so that's always interesting."
Victor Burek : "i floated the weekend as well"
Victor Burek : "moshe, i would stay close to the lock button but hold off til later see what happens today"
Victor Burek : "i'm seeing about .05 worse at plaza"
Andrew Horowitz : "ok lets look at the chart guys, especially on the GN lets say pricing came out around 100 105-31 why would they have repriced better at any point after that and since we are currently trading at 105-28 looks to me like it should have been worse by about .093"
Brayden Alexander : "same here on FHA. slight worse than Fri on FNMA.... no reprice on Friday."
Victor Burek : "are your rates better, same or worse from friday?"
Moshe Berg : "float or lock day? I waited till today so lenders would give us all the gains..didn't happen...Consensus?"
Victor Burek : "yep, check with your investors as you may not have a choice who to use"
Michael Mitchell : "Most of my lenders don't allow e-signatures... Wish that would change"
Steven Stone : "suredocs charges a flat fee per year - i like that better"
Scott Rieke : "I've had a client using EchoSign - worked with 4506T"
Victor Burek : "http://www.docusign.com/"
Victor Burek : "i've used Docusign bryce"
Bryce Schetselaar : "what is the most common esignature company for initial disclosures?"
Brett Boyke : "look up the Kyle Bass speech he did at the U of Chicago last month on that very subject"
Jeff Anderson : "I saw that and was wondering the take on that. So if that Japanese QE doesn't work, they're really screwed, right? Approx same size of QE for a country with an economy 1/3 the size of ours after 20 years of stagnation."
Scott Rieke : "The fact they have halted the JGB market two-days in a row does not bode well for macroeconomics"
Brett Boyke : "A lot will be determined after the bell tonight - Alcoa reporting"
Scott Rieke : "In my humble opinion, I would like to see a 1.57 - 1.69ish range over the next month or so, going into what is going to be a wild summer."
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