Amazing to see us deviate more than a tick or 2 from unchanged today!
This brings the 5.5 to 100-26+. Not a ton of reprice risk at that level, but it may help us get out of bed for the morning and start paying attention. Spreads are tighter a bit today and treasuryies seeem to be under a bit of extra selling pressure since about 10AM when scheduled data came out. Probably chalk this up to consumer sentiment being much higher than expected.
A couple of interesting things to consider there...
First of all, much of that bullishnss is automatically attributed to gas prices, but here's an even more fundamental "tightener" built into positive consumer sentiment. In looking at treasuries versus MBS, what good does positive sentiment do for treasuries? none.
But as far as MBS, we have all seen that lousy consumer sentiment coincides with "whatever else" and creates the mentality that we see lead to folks who are perfectly able to afford a home payment (albeit with a bit of difficulty), up and say "bring on the foreclosure!"
So whereas positive sentiment doesn't really have an implicit benefit to treasuries (well nothing should really, since, at least in this millenium, they are the risk-free benchmark), if you use your imagination (and a bit of logic I suppose), you could arrive at the conclusion that there is a slight implicit positivity for spread.
Nonetheless, we're down another tick now at 100-26. Stay on your toes IF you need to lock short term.