MBS Live: MBS Afternoon Market Summary
In more ways than one, Tuesday has turned out to be a carbon copy of Monday. Once again we have MBS hitting new all time highs, stocks sinking, 10yr yields hitting 1 month lows, and the Euro hitting 2+ year lows. Once again we have a sincere lack of market-moving data/events/headlines and an even bigger lack of volume. To put that in perspective, vs average volume in June of around 1 million 10yr futures contracts/day, we'll be lucky to break 600k today and didn't get there yesterday either. Volume in MBS is light as well with the illiquid conditions benefiting prices. Fed buying was more than enough to take down the day's new supply. If anyone else wanted to buy, prices just inched higher. Things get more normal tomorrow in the sense that there will be economic data and a much more pertinent Treasury auction in the form of 10yr Notes at 1pm.
MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
|
|
|
||||||||||||
| Pricing as of 4:06 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.
12:59PM :
ALERT ISSUED:
MBS Outperform Sideways Treasuries. Limited Reprice Potential
Two things are apparently working in favor of MBS at the moment: low volume and even lower supply. The low supply is really the benefactor as low volume can be a prelude to price movements in either direction. But in general, low volume sort of magnifies whatever is going on as it allows for each dollar traded to constitute a higher percentage of the total than it otherwise would.
It just so happens that demand outweighs supply today so MBS have had nowhere to go but up, despite flat Treasuries. Even so, the potential for positive reprices is limited due to the generally less active and less aggressive lender pricing behavior on and around roll days. Too, we should consider all-time low rates prevailed across most lenders yesterday, suggesting that there's no rush to lower rates to fill any empty capacity.
Even so, it wouldn't be a shock to see a few of the characteristically aggressive lenders reprice positively here, even if only by token amounts. The 3yr Treasury auction is coming right up with results out around 1:01:30pm.
It just so happens that demand outweighs supply today so MBS have had nowhere to go but up, despite flat Treasuries. Even so, the potential for positive reprices is limited due to the generally less active and less aggressive lender pricing behavior on and around roll days. Too, we should consider all-time low rates prevailed across most lenders yesterday, suggesting that there's no rush to lower rates to fill any empty capacity.
Even so, it wouldn't be a shock to see a few of the characteristically aggressive lenders reprice positively here, even if only by token amounts. The 3yr Treasury auction is coming right up with results out around 1:01:30pm.
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.
Jason Adams : "REPRICE: 4:04 PM - Flagstar Better"
Victor Burek : "REPRICE: 4:01 PM - Nexbank Better"
Thomas Nelson : "REPRICE: 3:33 PM - NYCB Better"
Eric Franson : "REPRICE: 3:32 PM - Wells Fargo Better"
Matthew Graham : "6/13/12"
Matthew Graham : "lowest 10yr was last one at a high yield of 1.622'"
Andy Pada : "MG, and what was the lowest yield on a 10 YR auction."
Andy Pada : "it has become a day to day analysis with the belief tha we are in a declining interest rate market."
Andy Pada : "Lots of people on CNBC saying 1"
Matt Hodges : "JW believes 1"
Victor Burek : "my prediction a while back was it wouldnt go below 1.5"
Matt Hodges : "1.25ish"
Andy Pada : "what is everyone's prediction on how low the 10 YR will go?"
Christopher Stevens : "It is a lock desk nightmare"
Matthew Graham : "We've sailed into uncharted waters and have seen sights worthy of returning back to the mainland to report, yet we continue sailing... "
Victor Burek : "not sure if they will drop below 3.25...but 3.25 will pay better "
Matthew Graham : "I don't know CS, did we really think they'd drop below 3.75? I mean, I know some of us did, but most probably didn't. "
Matt Hodges : "what do you think, CS?"
Christopher Stevens : "I mean this is kind of scary"
Matthew Graham : "as we've seen, such things take TIME, and the willingness of folks like WF to slot sub-liquid-coupon rates into their portfolio"
Christopher Stevens : "do we really think rates will drop below 3.250%"
Matthew Graham : "i don't ponder it. Not sure what the point is really. It's not like there's some imaginary line in the sand at 3.25 where rates can go no lower. Huge, epic resistance? yes, but not impenetrable wall. "
Andrew Russell : "so the fact that there is no 2.5 coupon isnt something we should ponder? "
Victor Burek : "its going lower"
Christopher Stevens : "VB- I really can't believe we dipped this low"
Matt Hodges : "i can't remember the last reno i did - i agree with Victor - feel the vibrations in the market and let them guide your float/lock decisions"
Victor Burek : "its pretty simple decision regardling locking...float til within 15 days, then lock"
Matthew Graham : "sure they could go lower. en masse? not sure, but they certainly went lower than 3.75 before TBA MBS had any liquidity there. "
Victor Burek : "you are locking to early"
Andrew Russell : "MG, a random question for you, since there is no 2.5 coupon could rates get lower than 3.25% on the 30 year? Or that is it..."
Christopher Stevens : "I spend more time with reno's than locks right now"
Matthew Graham : "pretty much already has"
Christopher Stevens : "so does best ex drop below 3.625 on a 30YR CONV "
Curt Sandfort : "just wow"
Curt Sandfort : "106"
Andrew Russell : "Wells mandatory is an eighth better at the 3.75% note rate today vs yesterday"
Justin Dudek : "thats what i figured, just wanted to get consensus from anyone else"
Andrew Russell : "JD, might be your company or the specific lender"
Justin Dudek : "lost over 50bps on 3.75 fha"
Justin Dudek : "from yest to today, it seems like pricing has deteriorated quite a bit. has everyone seen this today, or is it possible pipeline control and rollover?"
Read what our user's have to say about MBS Live on LinkedIn.
» Start a two week free trial of MBS Live.
MBS Market Alerts
