Although agency MBS greatly lagged benchmark Treasuries today, price levels rose enough for lenders to improve rebate (so they could work on filling those 4.0 commitment buckets). 

The October delivery FNCL 4.0 went out +0-10 at 102-19 and the October delivery FNCL 4.5 was bid +0-06 to 104-07 at 5pm.  New loan supply offers totaled about $2 billion (which is close to average).

These price appreciations leave the FNCL 4.0 just below historic highs....

The secondary market current coupon is under 3.50% when accounting for the phantom 3.5 coupon, but I do not use the phantom 3.5 MBS coupon in my current coupon calculation. Instead I focus on the production coupons instead, which are 4.0s and 4.5s right now. Using my model, the current coupon was -4.4bps to 3.616% today.  Yield spreads moved wider as volatility rose and swaps spreads widened vs. Treasuries.  My version of the secondary market CC is +112bps/10yr TSY and +110bps/10yrIRS. READ MORE ABOUT YIELD SPREADS

On average, rebate improved by 21bps at the five majors with the lion's share of pricing gains seen in the note rates used to fill 4.0 MBS trades. Buydowns were largely unchanged. Week over week, loan pricing is mixed. READ WHY & DON'T MISS THIS ADVICE FROM A PROFESSIONAL PIPELINE HEDGER

I don't want to get your hopes up but there was a bit more action in 3.5s today.  Unfortunately, while the street continues to trade production MBS to extremely short hedge ratios, 3.5s are still off-limits to pipeline hedgers. If that changes I will be the first to alert.

DID YOU LOCK A LOAN TODAY? If yes, at what rate?

Durable Goods at 0830 tomorrow....