MBS Live: MBS Afternoon Market Summary
Wow... This is now officially a record breaking week. We'll need to do some more digging in order to determine just how far back in time we'd need to go in order to find a week with a more narrow trading range for MBS or 10yr yields. For sure though, we haven't seen any this year (though one was close). It felt all the more SLOW due to the previous week being similarly slow. At the end of that one, the verdict is the same as it is today: markets generally on hold until next week's FOMC. That said, we DO think that there could be a decent amount of volatility before Wednesday afternoon (don't forget, there are Treasury Auctions as well). Even then, the Announcement itself, and Bernanke press conference are the "biggies" for which we've been waiting.
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.
1:38PM : ALERT ISSUED: Futures-Led Mini-Snowball Leading to Modest Late Day Gains
10yr Treasuries and MBS are telling two different stories at the moment. While 10's look to have broken lower in yield past their earlier sideways resistance, MBS are still mostly holding their range.
Cash volume remains light, but there was a bit of a pick-up in futures volume (and prices) for 10yr's. Another little incremental pop in price from one bigger buy ticket can trigger a few more shorts to cover, creating another little pop higher, and the cycle repeats itself until black boxes or human beings step in.
What we're left with is a mini-snowball from 1.98 to 1.97 with the first pause for reflection there. If others are as "done" with the week as we are, it wouldn't surprise us if black-box trading tied to equities has been left with a little bit more control than it otherwise might have. In other words, we're not witnessing any organic, material bullishness in bond markets at the moment, but an incidental vulnerability being exploited in our favor.
Wash rinse and repeat within the range. If 10's run past 1.95, then it'd be more of "situation." But for now, the end-of-week papers are being shuffled and filed, resulting in the appearance of activity rising from 0 to 0.5 on a scale of 10. MBS got into the green? Great! But we're not reading too much into it not only because MBS are less willing to chase this uptick, but also because it's what we'd call "incidental" movement--not indicative of a shift in underlying trading sentiment. That said, if we pick up another tick or two, another lender or two besides PF might feel generous enough to cough up another few bps. So if you were planning on locking today, we'd wait until closer to cut-off, just in case.
Cash volume remains light, but there was a bit of a pick-up in futures volume (and prices) for 10yr's. Another little incremental pop in price from one bigger buy ticket can trigger a few more shorts to cover, creating another little pop higher, and the cycle repeats itself until black boxes or human beings step in.
What we're left with is a mini-snowball from 1.98 to 1.97 with the first pause for reflection there. If others are as "done" with the week as we are, it wouldn't surprise us if black-box trading tied to equities has been left with a little bit more control than it otherwise might have. In other words, we're not witnessing any organic, material bullishness in bond markets at the moment, but an incidental vulnerability being exploited in our favor.
Wash rinse and repeat within the range. If 10's run past 1.95, then it'd be more of "situation." But for now, the end-of-week papers are being shuffled and filed, resulting in the appearance of activity rising from 0 to 0.5 on a scale of 10. MBS got into the green? Great! But we're not reading too much into it not only because MBS are less willing to chase this uptick, but also because it's what we'd call "incidental" movement--not indicative of a shift in underlying trading sentiment. That said, if we pick up another tick or two, another lender or two besides PF might feel generous enough to cough up another few bps. So if you were planning on locking today, we'd wait until closer to cut-off, just in case.
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.
Ken Crute : "yes that would be good news "
Gaius Rossini : "if it actually did get that easy... people here would be pretty excited right?"
Brent Borcherding : "No doubt.....LP seems to shoot anything over 105% down."
Ken Crute : "Gaius thats a long list. It seems that many loans that meet the parameters of the OA program are getting a Caution in LP, so the short answer is have the AUS match their guidelines and more loans will get approved"
Gaius Rossini : "what can Freddie do to make OA as fast or almost as fast as manual?"
Ken Crute : "Gaius: yes RR is much easier than OA as LP cautions most files where ss can do a manual and breeze thru the loan "
Gaius Rossini : "sounds like something new. does anyone have any color on what the changes were?"
Bryan LaFlamme : "Just FYI for the group. I was on hold w/ Fannie about 3 DURP files yesterday for about 3 hours. I did however get a call back, this morning, from the same guy I spoke w/ yesterday, going over 1 of the trouble tickets that was put in. Not bad service"
Gaius Rossini : "there are rumors floating around that Freddie is looking to change LP such that all the information they have will flow through, making RR loans easier to process"
Matthew Graham : "12:41pm to 12:52pm without a TSY tick. And I'm seeing the same thing . I don't know that I've ever seen 10's go that long without moving"
Matthew Graham : "but don't take my word for it: http://tinyurl.com/7ww55nz "
Brent Borcherding : "Noone left to hit the throttle?"
Matthew Graham : "Bunds really trying to drag TSYs lower."
Matthew Graham : "We'll see what the 3-5 people left trading have to say about that! "
Chris Kopec : "Mehinks we finish in the green."
Matthew Graham : "Brent, ABM... I apologize if the general air of resignation in the MBS posts this week has driven away folks who might have experience that would speak to your questions. I feel personally responsible."
Michael Tadros : "REPRICE: 12:00 PM - Provident Funding Better"
Tony Cardinal : "would be nice to see support here for a nice bounce."
Aaron Buyside Meyer : "How long is BofA running for processing-closing on Harp loans?"
Brent Borcherding : "On to my issue, anyone recently had a resub with citi? TImeframe?"
Brent Borcherding : "Hmm....that's going to be a problem. That said, companies like Freedom Mortgage were doing them with an AVM of 115% or less...may be your best bet."
Joshua : "Servicer is BofA... "
Matt Hodges : "with same servicer, you usually don't need either AVM or appraisal, like with WF"
Brent Borcherding : "Who is the current servicer, Joshua?"
Joshua : "GM.. is that possible to do a IRRRL-VA, with a property that is at 115-125% LTV?"
Andy Pada : "Today is CounterCulture Day...sounds like a reason for early dismissal."
Matthew Graham : "prices may have ticked as low as 103-14 and as high as 103-19, but you can see the range... 103-15 to 103-18. wow..."
Matthew Graham : "insult to injury at this point"
Tony Cardinal : "just adding to your extremly tight range, it appears MG?"
Matthew Graham : "some in 44"
Matthew Graham : "I think some close in 15"
Andy Pada : "So european markets closing in 40 minutes?"
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