MBSonMND: MBS RECAP
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| Pricing as of 4:02 PM EST | ||||||||||||||
Afternoon Market Updates
A recap of MBS Market Updates provided by MND Analysts and streamed live to the MBSonMND Dashboard
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3:06PM :
MBS Outperforming Treasuries Late In The Day
At the 3pm official bond market close, the 10yr yield will go into the books today with a mark of 3.65, the highest closing mark since May 3rd, 2010. Treasuries have continued to trudge sideways in low volume. The range was broken, on high volume, the verdict is in... The market doesn't need to know exactly where it wants to be right now as long as it is over 3.57... MBS, on the other hand, have crept up in price a bit late in the day with the FNCL 4.5 2 ticks higher at 100-29. We're not sure this is exactly the time to be repricing for the better, but at least it should help finally douse any remaining embers burning for another reprice for the worse.
2:23PM :
Markets Drift Sideways In Low Volume
Volatility and Volume have died down in the bond markets with volume totals for 10 yr contracts averaging under 1600 since just after the noon hour. The 10yr yield hasn't fluctuated much with the current mark at 3.644 as we approach the 3pm bond market close. FNCL 4.5's stand at 100-27.
2:22PM :
Markets Drift Sideways In Low Volume
Volatility and Volume have died down in the bond markets with volume totals for 10 yr contracts averaging under 1600 since just after the noon hour. The 10yr yield hasn't fluctuated much with the current mark at 3.644 as we approach the 3pm bond market close. FNCL 4.5's stand at 100-27.
1:26PM :
Bond Market Moderating Slightly From Worst Levels Of The Day
Reprices for the worse have come in more than once from more than a few lenders. If you haven't seen them or have only seen one, it remains a risk. But bonds have moderated somewhat. The 10yr yield is down 2 bps from 3.66 to 3.64. FNCL 4.5's fell to 100-22 earlier and have since moved back up to 100-26.
12:47PM :
ALERT:
Reprices for the Worse Reported
As "rate sheet influential" MBS prices have fallen further, reprices for the worse have been reported. Some lenders have already repriced twice.
12:02PM :
Treasuries Continue At Highs, MBS Near Lows
MBS FNCL 4.5's are down 13 ticks at 100-30 while the 10yr note sits at 3.646. S&P is at 1305.13. There is no data remaining today and volume is much lower than it was this morning, but the "shift" seems evident. At least for now, we've broken the range on the bad side and that is reflected in rate sheets. Reprices for the worse remain a risk if you haven't seen them yet.
11:31AM :
ALERT:
Gauging Reprice Risk: Desk Dependent
Gauging reprice risk is difficult right now because some desks delayed the release of rate sheets while others simply decided to ding rebate enough on first release to account for another leg lower in MBS prices. That said, know that reprices for the worse are very possible at these levels, but it's all dependent on your desk's individual strategy.
11:23AM :
New MBS Commentary Post
11:03AM :
ALERT:
10's Breaking! More Danger!
The high yields keep getting higher. Now pushing up into 3.64 at times. This continues to put pressure on MBS to give up their 101 handle, and continues to keep reprice risk elevated.
Featured Market Discussion
A recap of the featured comments from the Live Discussion on the MBSonMND Dashboard
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Adam Quinones : "no concrete plan"
Adam Quinones : "they are gonna offer up more "ideas""
Adam Quinones : "no no no"
Jason Evans : "looks like aq gets his wish next week http://www.cnbc.com/id/41429486"
Gus Floropoulos : "its in times like these that the information and guideance provided by the analysts helps to set us apart. There were at least 3 months last year that helped my division generate 30-50% more in revenues (last March April and May) based on the guideance and information. It is up to us to pull the triger, we have a better shot at making better decisions to benefit our clients and our bottom line with the education and assistance we receive from the analysts on MND. When the 10 yr is @ 2.3, we a"
Adam Quinones : "bear flag breakout"
Dirk Postupack : "in may of 2009 we had black wednesday......what are we going to call this week"
Victor Burek : "another .3 worse"
Victor Burek : "flagstar 2nd reprice"
Mike Drews : "chase -.25"
Adam Quinones : "otherwise...we want to the par coupon to be a lower yield and we want it to be less sensitive to shifts in benchmark yields. this would imply MBS prices are more stable."
Adam Quinones : "we want shorter duration and a move down in coupon"
Jason Wilborn : "or to rephrase - we want a little shorter duration for price stability"
Adam Quinones : "since we want to be trading 4.0s and 4.5s we'd prefer to be much more less sensitive to shifts in benchmarks"
Adam Quinones : "shorter duration = less sensitive to shifts in loan pricing"
Matthew Graham : "it means 4.5's will never prepay!"
Steven Stone : "interesting side note...52 week low yield on the tnx was right around 2.33...you can almost make that on a 5 year today"
Michael Kelleher : "8.8 duration?"
Adam Quinones : "7-10 sector"
Adam Quinones : "im running 4.5s and getting 8.08 duration"
Adam Quinones : "we're getting a lot of color from desks this morning saying real$ is buying at the price lows. MBS market tends to hold the line when it comes to a shift in duration bias. So basically, the MBS market's hedging needs will dictate our future. "
Adam Quinones : "yes supply drying up"
Adam Quinones : "buydowns not too expensive though so you could buydown gfee to nothing "
Adam Quinones : "we're in a gray area on best ex though...tough to write 5.25% "
Steven Stone : "not much volume over here lol"
Adam Quinones : "Steve you selling 5.0s now right?"
Brett Boyke : "this about sums up the FED/Bernanke QE2 dynamic - "He's given birth to a monster, turned the laws of the markets on their head. Weak data causes commodities to rally, equities to follow and bonds to sell off, in expectation of more free money. Big corporations have zero incentive to hire domestically, sensible investment choices are rendered meaningless.""
Adam Quinones : ""receive" is a direction on swaps..if I receive, then I will take advantage of higher rates. TYH = 10yr TSY futures. 3.70 is our mathematical target. Short base = there has been much short selling lately. To book a profit those positions must be covered. Im watching for that...."
Adam Quinones : "Steve id rather receive here at least until 10s touch 3.70 or the short base in TYH thins out a bit. "
Ira Selwin : "Price changes rolling in - BB&T and FAMC"
MBS Market Alerts
