MBS Live: MBS Morning Market Summary
Treasuries and MBS have had varying reactions, at times, to fiscal headlines.  In one moment, bond markets may have weakened in response to the promise of a deal and at other moments, weakness has been chalked up to the absence of a deal.  The same is true for the positive momentum in place currently.  While we haven't seen as much of it over the past few days, there have been times where a debt deal falls off the table and bond markets have improved (ostensibly due to the "flight to safety" mentality, regardless of the fact that a US default theoretically has implications for Treasuries' credit quality).  Today we're seeing bond markets improve for the opposite reason (debt deal looks to have been reached and bond markets breathe a sigh of relief). 

While this isn't the only consideration for bond markets, it's true that arguments can be made for the multiple personality disorder when it comes to a debt deal.  What we've seen in the past (and what we suggested when the drama escalated at the beginning of the month) is that the fiscal debate and it's effects on markets stand a good chance to be superseded by the economic data that will finally be released after the government is reopened. 

Serious questions remain as to how markets will approach the next few months considering the temporary nature of the debt deal as well as the fact that new economic data is guaranteed to be affected by the shutdown.  Of course traders are able to adjust their expectations based on the shutdown, but that's not exactly a highly empirical process with robust historical precedent--especially not that coincides with the potential withdrawal of QE (nothing could coincide the potential QE withdrawal process because there is no historical precedent at all--let alone a robust one).
Please note the timestamp on the pricing snapshot.  Prices have since rallied significantly and several lenders have reported positive reprices.
MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
FNMA 3.0
96-16 : -0-04
FNMA 3.5
100-26 : -0-02
FNMA 4.0
104-07 : +0-01
FNMA 4.5
106-17 : -0-01
GNMA 3.0
97-10 : -0-05
GNMA 3.5
101-24 : -0-03
GNMA 4.0
104-26 : +0-00
GNMA 4.5
107-04 : -0-02
FHLMC 3.0
96-03 : -0-04
FHLMC 3.5
100-17 : -0-02
FHLMC 4.0
103-26 : -0-01
FHLMC 4.5
106-05 : -0-01
Pricing as of 11:09 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.
10:28AM  :  House Said to Bring Senate Bill to Vote
The alert on C-span says "SPKR. Boehner to bring Senate debt ceiling plan to a vote." Several reps have mentioned "about to vote" in delivering remarks currently.

Bond markets came under pressure after the news of the potential House vote broke. It's still not clear if there will be a vote, but depending on how many more reps take their 5 minutes of opening arguments, it could be a while before we know.

Fannie 3.5s are back in line with levels at the last update after falling briefly with the news.
9:51AM  :  Mixed Overnight, Weaker Into US Hours, Trying to Hold Ground
Treasury yields moved higher into the overnight session, but fell during European hours, hitting the US open right in line with yesterday's latest levels. The political press mill is churning full tilt with news of a Senate-drafted debt deal being reported as if it were new news for the past 12+ hours. Those headlines continue flowing presently with wires suggesting a deal is imminent and that the Senate is in talks with the White House regarding strategy to get the bill passed by the House.

Bond markets have moved into weaker territory since the beginning of the domestic session. 10yr yields' backs are up against a wall at very important technical levels (2.744 currently, which is the last frontier of the dividing line between the current range and the next one higher: 2.75-3.0).

So far, 10's have held their ground before breaking above 2.75, and while that continues to be the case, MBS have moved off their lows of the morning, now back to 100-26 in Fannie 3.5s--only 2 ticks weaker on the day. Fannie 4.0s are back to unchanged on the day.

NAHB's Housing Market Index will report as normal at 10am, but the more relevant data arrives this afternoon in the form of the Fed's Beige Book (not normally a big deal, but in this environment, it comprises a much greater portion of the total body of economic data, so we're at least tuning in). Beyond that, fiscal headlines will likely continue doing what they do. "Fool me twice" has long since passed when it comes to markets reacting to a resolution that isn't really a resolution, so if one actually comes, expect the reaction to be bigger.
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.
Christopher Stevens  :  "like herding cats in DC"
Matthew Graham  :  "www.marketwatch.com/story/boehner-to-take-up-senate-debt-budget-plan-2013-10-16"
Christopher Stevens  :  "According to CNBC report Boehner has said he will go along with Senate deal"
Jason Zimmer  :  "i have had MANY false negatives. I would suggest having borrower call servicer to ask specifically if it's Fannie or Freddie. If you get a yes on either call Fannie or Freddie and they will figure it out. I never stop at the public sites."
Jason Zimmer  :  "hodges - are you running the loan through the public site or DU and LP?"
Matthew Graham  :  "near passage. they have to find a way to trick the House into supporting it. Invisible ink could work. "
Matthew Graham  :  "senate-drafted debt deal"
joon choi  :  "sorry what is issue with house and senate?"
Christopher Stevens  :  "going to be hard to hold below 2.75 today if that passes"
Matthew Graham  :  "RTRS - U.S. SENATE LEADERS IN TALKS WITH HOUSE LEADERS ON WAYS TO WIN FAST PASSAGE OF FISCAL DEAL IN BOTH CHAMBERS-AIDE "
Jeff Anderson  :  ".......WHICH WON'T GET BY THE HOUSE?????? Are they warming up the white horses to ride in to town and save the day? Like Daniel Day Lewis......"
Matthew Graham  :  "RTRS- US SENATE LIKELY TO MOVE 'QUICKLY' TO PASS FISCAL DEAL BEING NEGOTIATED-AIDE "
Matthew Graham  :  "RTRS- U.S. SENATE NEGOTIATORS 'VERY CLOSE' TO ANNOUNCING DEAL ON DEBT LIMIT EXTENSION, GOVERNMENT FUNDING BILL-SENIOR SENATE AIDE "
FPH  :  "Bb he needs to have the required equity in order to move to another FHA loan. "
Mike Drews  :  "it's easier in a relocation situation..not sure one kid is going to do it..a litter of 2 or 3..maybe"
Victor Burek  :  "I thought the exception due to out growing the place was an unexpected happening...like having triplets...this seems very planned, got married had a baby"
joon choi  :  "maybe, it is not easy getting two fha loan"
Ben Biscoe  :  "3 yrs"
Mike Drews  :  "how long has he live in his current home?"
Ben Biscoe  :  "i have a guy with a current FHA loan on a 620 sq ft 1 bedroom condo, he just got married recently and had a baby so the place is too small now. he should be able to get another FHA loan to buy a bigger place right>"
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