MBS Live: MBS Morning Market Summary
MBS began the day in line with Friday's closing levels, just over 103-00 in the "production coupon" Fannie 3.0 (referred to as "production coupon" because the core quotes of 3.375-3.625% are all slotted into the 3.0 coupon whereas 3.785% to 4.125% account for most of the Fannie 3.5 coupon pools).  Treasuries were in similarly unchanged territory after a low volume and slightly volatile overnight range.  After an hour of indecision, Treasuries began improving tentatively.  Stocks initially opened higher but soon progressed into negative territory, giving bond markets a boost along with scheduled "operation twist" buying from the Fed.  Both of these factors are in play today due to the low volume, and wouldn't necessarily be on our radar otherwise.
MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
FNMA 3.5
105-15 : +0-03
FNMA 4.0
106-27 : +0-01
FNMA 4.5
107-32 : +0-01
FNMA 5.0
108-28 : +0-00
GNMA 3.5
107-28 : +0-02
GNMA 4.0
109-13 : +0-01
GNMA 4.5
109-19 : +0-00
GNMA 5.0
110-17 : -0-01
FHLMC 3.5
105-09 : +0-03
FHLMC 4.0
106-20 : +0-01
FHLMC 4.5
107-09 : +0-01
FHLMC 5.0
108-04 : +0-03
Pricing as of 11:08 AM EST
Morning 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 morning.

11:06AM  :  ALERT ISSUED: MBS, Treasuries Approach Friday Morning Levels As Stocks Slide
It continues to be the case that very little is happening this morning with the exception of the just-completed Fed "Twist" buying just at 11am. MBS and Treasuries have rallied, though we'd note that volume is low enough that some of the improvement could be due to the Fed buying operation (i.e. dealers letting prices drift higher into guaranteed Fed buying).

Even so, the improved levels have held up in the first few minutes following the 'twisty' operation, ostensibly helped along by a stock market that continues to sell off from highs just before the 10am hour. S&P futures are down roughly 7 points since then.

10yr yields are 2.5bps better since last check, currently 1.6335 and Fannie 3.0 MBS are up 4 ticks at 103-08/103-09 which has been a resistance level for the past hour. It's early in the day still, but positive reprices seem increasingly likely if we break higher from here (which looks like it might soon be the case).
9:07AM  :  ALERT ISSUED: Bond Markets Broadly Unchanged On Expcectedly Slow Monday
A much slower-than-normal overnight session and much slower than normal domestic open leave bond markets in relatively unchanged territory with Fannie 3.0's in line with Friday's close at 103-04 and 10yr yields less than 1bp higher than Friday's 3pm levels at 1.6573. 10's traded in a range of 1.63 to 1.67 overnight, exaggerated by the incredibly low volume.

Contributing to the low volume is a market holiday for Japan as well as summer vacationing among market participants. News was light out of Europe with markets digesting an Italian debt auction reasonably well but looking more forward to tomorrow's economic data offerings.

It's the same story domestically, with nothing on the calendar this morning (except for the usual scheduled Fed "Twist" buying) and the more important economic data hitting tomorrow in the form of Retail Sales. The rest of the day, then, will simply be about observing and assessing any threats to what should be a sideways range.
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.

Brett Boyke  :  "worked wonders the last 2 times"
Brett Boyke  :  "had to laugh - I didn't realize QE was effective in reducing unemployment"
Brent Borcherding  :  "I'd wait for the green reprices, but that is just me"
Matt Hodges  :  "overall strategy is a good one"
Matt Hodges  :  "and today you can lock if it turns red or wait until green causes reprices"
Brett Boyke  :  "saw this on CNBC - with investor optimism boosted late on Friday when the San Francisco Federal Reserve President John Williams advocated a fresh round of bond-buying to decrease unemployment at a faster rate. "
Victor Burek  :  "so a 30 day lock today is better thana 27 day lock"
Andy Pada  :  "Actually to be fair Ira, i said that about VB. I think VB has said questioned the virtue of locking in on a Friday when the last 10 weeks has proven that Monday would be a better day to lock."
Matthew Graham  :  "factoring in TVM, you could call it better on a technicality. Or you could revise to say "no worse""
Ira Selwin  :  "But VB said for 10 weeks pricing has been better on Monday. "
Victor Burek  :  "no..same pricing. but if you locked friday you only have a 27 day lock left, locking today you have 30 which is better"
Ira Selwin  :  "so VB was wrong then?"
Andy Pada  :  "Just so you know, VB index still in tact...somewhat. Pricing on Friday at this time and pricing now is exactly the same according to cash window."
Jeff Anderson  :  "IN VB WE Trust. GM, all."
rford  :  "VB trend is being tested, but i have faith!"
Jill Statz  :  "Craig...you should always check with your local office to find out their turn times...every office is different."
Craig LaBruno  :  "So just make sure you tell everyone upfront that there could be delays because every file must be reviewed by USDA themselves before it can close."
Craig LaBruno  :  "I closes my first 2 USDA loans last month. One of the files USDA had the file for like almost 6 weeks before they gave us final approval to close. "

Read what our user's have to say about MBS Live on LinkedIn.
» Start a two week free trial of MBS Live.