MBS Live: MBS Afternoon Market Summary
Regardless of which scene in Monty Python's Holy Grail you prefer, there's no doubt that the recent range in MBS and Treasuries is channeling one of the "not dead yet" speeches. In today's instance, it appeared that Fannie 3.5's may have taken an arrow that pushed them over the highs of the week at 103-23. But just as Lancelot eulogizes "you shall not have died in vain," we saw MBS give their own version of "actually, I'm not quite dead" as they bounced back lower, into the safety of the range. And just as it seems that Lancelot in some way longed for the drama or the poignant moment where something fundamentally changed about his journey only to seem somewhat disappointed that his squire survived, so too are we disappointed to continue to observe such a boring and flavorless week. MBS gains are never boring though, and we're still 4 ticks up. "And there was much rejoicing..."
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.
2:51PM :
ALERT ISSUED:
10's Make Run at 1.95, MBS Break Into New Highs
Green is good. MBS are two ticks higher than last update when we said 10's would need to make a run at 1.95 or MBS have seen their highs. So in a way, the gains are still boring and uneventful because markets are--for lack of a better term--"following the rules."
Still nothin' happenin'... That said, there's a slightly increased chance of positive reprices due to the incremental gains in MBS.
Bottom Lines: - 103-22 in Fannie 3.5's at the moment.
- This matches the high from 4/16.
- No ranges broken yet.
- No fundamental comment on broader shifts, especially considering relatively light volume at the moment.
Still nothin' happenin'... That said, there's a slightly increased chance of positive reprices due to the incremental gains in MBS.
Bottom Lines: - 103-22 in Fannie 3.5's at the moment.
- This matches the high from 4/16.
- No ranges broken yet.
- No fundamental comment on broader shifts, especially considering relatively light volume at the moment.
1:14PM :
ALERT ISSUED:
Slow, Steady Gains; Narrow Range; Limited Positive Reprice Potential
MBS are enjoying the stability offered by the low, narrow trading range in 10yr yields, taking further opportunities to tighten the screws into the afternoon.
As we often note, MBS are not fans of volatility. And as one can see in the fact that the current week's trading range in 10yr yields being the narrowest in recent memory, there is no volatility. MBS are fans! Fannie 3.5's have ratcheted up patiently to the point where some "early crowd" lenders would consider a positive reprice (one already did).
But further gains will be tough at this point unless bond markets in general make a unified move to the upside. And why would they?! Spain's auction wasn't enough.... Economic data wasn't enough.... Volatile stock market swings weren't enough... In the 2 hours left between now and the TSY close, something unexpected would have to transpire to motivate a break of the range.
We could MAYBE believe that there could be an outside chance that tradeflows and liquidity could break down in such a way that a mini (and we're talking VERY "mini") snowball could carry yields just lower than 1.95 but that's a stretch given where we've seen the volume and resistance so far. And if 10's are doing anything else besides breaking lower, there's a good chance MBS have seen their highs of the day.
Bottom line, with 4/32nds on the board, lenders aren't strictly forbidden from repricing for the better, but we're not expecting to see many. More importantly, we're not seeing risks for negative reprices.
As we often note, MBS are not fans of volatility. And as one can see in the fact that the current week's trading range in 10yr yields being the narrowest in recent memory, there is no volatility. MBS are fans! Fannie 3.5's have ratcheted up patiently to the point where some "early crowd" lenders would consider a positive reprice (one already did).
But further gains will be tough at this point unless bond markets in general make a unified move to the upside. And why would they?! Spain's auction wasn't enough.... Economic data wasn't enough.... Volatile stock market swings weren't enough... In the 2 hours left between now and the TSY close, something unexpected would have to transpire to motivate a break of the range.
We could MAYBE believe that there could be an outside chance that tradeflows and liquidity could break down in such a way that a mini (and we're talking VERY "mini") snowball could carry yields just lower than 1.95 but that's a stretch given where we've seen the volume and resistance so far. And if 10's are doing anything else besides breaking lower, there's a good chance MBS have seen their highs of the day.
Bottom line, with 4/32nds on the board, lenders aren't strictly forbidden from repricing for the better, but we're not expecting to see many. More importantly, we're not seeing risks for negative reprices.
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.
BVG : "REPRICE: 3:09 PM - Interbank Better"
Rob Clark : "REPRICE: 1:05 PM - Provident Funding Better"
Andy Pada : "cmb - cash money brothers"
John Paul Mulchay : "What's the motivation to increase pricing for durp?"
Andy Pada : "103-22 is my number; I've been buying my commitments at this #."
Paul Carlin : "waiting on wells to reprice, I have a few ready to close. "
Tony Cardinal : "by what andy? 25bps or so?"
Andy Pada : "REPRICE: 12:06 PM - AMC Better"
Bryce Schetselaar : "Anyone see that Plaza discontinued VA IRRRLs?"
Tony Cardinal : "what a beautiful 2 day channel"
Gus Floropoulos : "ISB"
Gus Floropoulos : "Hudson"
Gus Floropoulos : "Astoria"
Scott Fowler MBA : "since ING is done, does anyone have suggestions for Jumbo ARM's"
Matthew Graham : "Andy Pada (4/18/12 10:37AM): just letting you know that for anyone doing greater than 125% Refi Plus, if you haven't seen a change in premium, you will shortly. My advice is to lock in those loans if they are still pricing they way were yesterday."
Jeff Statz : "Andy Pada: Fannie Mae just changed their pricing on Refi Plus over 125% LTV. About 80 bps worse on the lower rates"
Matt Hodges : "not necessarily; that is what i remember from Andy's comments"
Jeff Statz : "you're saying, for only >125 LTV?"
Matthew Graham : "for cash window anyway. maybe elsewhere. I'll find the link. it came up in chat yesterday"
Matt Hodges : "over 125% ltv"
Matthew Graham : "it did for certain LTVs "
Mike Ford : "did DU Refi Plus just get worse pricing last few days for some reason?"
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