MBS Live: MBS Afternoon Market Summary
While Treasuries faced a major (relative) set-back with the stronger-than-expected ISM data on Monday, MBS merely backed down a bit from their two-day highs, never even dipping below Friday's closing levels (not even close, actually). After it was clear that the broader forces of "risk-on" were done moving in riskier directions for the day (as denoted by stock prices and bond yields both topping out shortly after 10am, MBS set about the task of reclaiming the highs from earlier in the morning. They did just that, and added a tick for good measure, helped along by fiscal cliff headlines and Bernanke's reassurances on QE.
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.
1:13PM :
ALERT ISSUED:
MBS At Highs Of The Day, Helped Along By Bernanke, Headlines
Bond markets were already on the mend following the scheduled Fed buying at 11:00am, but both MBS and Treasuries got an extra boost from Bernanke's 12:30pm speech and recent headlines that the European contingent will tell the rest G7 that Europe isn't the only major risk to global growth. The finger pointing session is sure to be extra pointed, as Germany, Francy, Italy, and Britain will not only call the US Fiscal Cliff into question, but also the recently more worrisome Chinese economy.
The bond market gains are more of a structural event surrounding the Fed buyback whereas the headlines have taken a bigger toll on stock markets. Still, the general shift from "risk-on" earlier in the day to "risk-off" currently, has helped Treasury yields to their lows of the day and MBS prices to their highs.
Fannie 3.0's are currently up 10 ticks on the day at 105-26 and 10yr yields are down to 1.616. We've seen one positive reprice earlier, but at current levels, we could see a few more. The incentive to improve rate sheets isn't immense, but varies depending on the lender. In general though, 10 tick gains aren't what they used to be, so we're not holding out for positive reprices across the board, but are slightly more optimistic that a few other lenders could follow the 'price leader.'
The bond market gains are more of a structural event surrounding the Fed buyback whereas the headlines have taken a bigger toll on stock markets. Still, the general shift from "risk-on" earlier in the day to "risk-off" currently, has helped Treasury yields to their lows of the day and MBS prices to their highs.
Fannie 3.0's are currently up 10 ticks on the day at 105-26 and 10yr yields are down to 1.616. We've seen one positive reprice earlier, but at current levels, we could see a few more. The incentive to improve rate sheets isn't immense, but varies depending on the lender. In general though, 10 tick gains aren't what they used to be, so we're not holding out for positive reprices across the board, but are slightly more optimistic that a few other lenders could follow the 'price leader.'
1:02PM :
Fiscal Cliff A Risk To Global Growth, Europe To Tell G7
(Reuters) - Europe will tell the United States, Japan and Canada next week that it is acting to resolve its sovereign debt crisis, but that U.S. fiscal policy and slowing growth in Japan and China also pose risks to the global economy.
Finance ministers of Germany, France, Italy and Britain will meet those from the other major developed economies in the Group of Seven at a dinner in Tokyo on Oct. 11.
"Developments in the euro area are not the only source of risks for the global economy," says a document with the main European policy messages prepared for the G7.
"Risks emanate also from fiscal uncertainty in the U.S., the decelerating recovery in Japan and slowing growth ... in several emerging market economies, especially in China," it said.
Finance ministers of Germany, France, Italy and Britain will meet those from the other major developed economies in the Group of Seven at a dinner in Tokyo on Oct. 11.
"Developments in the euro area are not the only source of risks for the global economy," says a document with the main European policy messages prepared for the G7.
"Risks emanate also from fiscal uncertainty in the U.S., the decelerating recovery in Japan and slowing growth ... in several emerging market economies, especially in China," it said.
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.
Eric Franson : "REPRICE: 2:03 PM - Wells Fargo Better"
BVG : "REPRICE: 1:13 PM - Interbank Better"
Clayton Sandy : "There are two different Amex accounts. A revolving and a charge account. DU doesn't like the charge accounts. Run it LP if you can and you won't have any issues. "
Matthew Graham : "RTRS- OIL PRICE SPIKE ALSO A RISK TO GLOBAL GROWTH, NEED TO PUSH FOR HIGHER OUTPUT, EUROPEANS TO TELL G7 -DOCUMENT "
Matthew Graham : "RTRS - EUROPE TO TELL G7 THAT U.S. FISCAL CLIFF IS A RISK TO GLOBAL ECONOMY-DOCUMENT "
Ira Selwin : "Correct"
Alan Craft : "I think it refers to AMEX type accounts"
Ira Selwin : "30 day account is not a revolving account."
MMNJ : "the requirement is for 30 day accounts only (need to show assets to cover payoff or proof tyhat is is $0 balanced)"
Ted Rood : "Not thinking that Fannie will require ALL revolving debt to be paid off (or prove enough assets available to pay off) prior to closing. Gonna go with the deliquent obligation angle."
Ted Rood : "Wonder if it refers to 30 day DELIQUENT accounts?"
Ted Rood : "As oppsed to having credit vendor verify minimum monthly payment and use that for DTI? Would stink for someone with a 10K Am Ex balance they can pay $200/mn on."
Alan Craft : "My UW requires that now. As in an AMEX account where payment and balance are the same."
Jason Zimmer : "What is everyone's thoughts on this from FNMA...Lenders will be required to document that the borrower has sufficient funds to cover the unpaid balance of all 30-day charge accounts. DU will be updated to include the balance of all 30-day charge accounts in the Total Funds to be Verified, as shown on the DU Underwriting Findings Report."
Matthew Graham : "RTRS - BERNANKE SAYS FISCAL POLICYMAKERS MUST PUT U.S. BUDGET ON SUSTAINABLE PATH, BUT NOT SO ABRUPTLY AS TO ENDANGER RECOVERY "
Matthew Graham : "RTRS- FED IS NOT, WILL NOT MONETIZE U.S. DEBT; ACQUIRING TREASURY SECURITIES ONLY ON TEMPORARY BASIS WITH GOAL OF SUPPORTING RECOVERY--BERNANKE "
Matthew Graham : "RTRS- BERNANKE REPEATS FED EXPECTS HIGHLY ACCOMMODATIVE POLICY TO BE APPROPRIATE FOR CONSIDERABLE TIME AFTER ECONOMY STRENGTHENS "
Matthew Graham : "RTRS- BERNANKE SAYS AS LONG AS PRICE STABILITY IS PRESERVED, FED WILL TAKE CARE NOT TO RAISE RATES PREMATURELY "
Rob Clark : "REPRICE: 12:11 PM - Provident Funding Better"
Matthew Graham : "Kocherlakota's magic # was 5.5% if I remember correctly"
Matthew Graham : "surprised he's no longer the title holder for the most-aggressively dovish FOMC gov."
Andy Pada : "Anyone read the CNBC article re: Evans and Fed easing until u/e rate below 7%? "
Dirk Postupack : "Tom.....take a look at a 90% w/ LPMI and compare w/ Claytons suggestion of MI "
Clayton Sandy : "Tom, why not do 90% with MI? Also, I'm not sure about US Bank Wholesale, but I've done a combo with US Bank Retail to 90% before. Not sure about frist time home buyer, but should be a pretty easy deal. "
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