INTRODUCING....
This is not a joyous event in any way shape or form. But attention needs to be called to it nonetheless. The FN 4.5 has lost its designation as the current coupon MBS title holder. We are now reluctantly watching the FN 5.0 for indications of rate sheet yield spread premium to come.
Why?
The MBS market is mostly sellers at the moment. Not even Asia has swooped in for bargain buying today. The rising rates market, the lack of willing buyers, and the amount of negative convexity in the FN 4.5 have forced us to focus on a slightly more stable MBS coupon. Without further ado here it is....
THE FANNIE MAE 5.0 PASS THROUGH MORTGAGE-BACKED SECURITY. (yay)
UGLY I KNOW...but not as beat up and battered as the previous champ.
3.90% has proven to be a strong support level for the 10 yr TSY note, regardless of the stall in TSY selling...MBS was weaker all day as volume was below normal and supply non-existant.
MBS Market Alerts
