MBS Live: MBS RECAP
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Afternoon Market Updates
A recap of MBS Market Updates provided by MND Analysts and streamed live to the MBS Live Dashboard.
3:28PM :
ALERT:
MBS Hit Lower Lows. Reprice Risk Still Present.
It's a bit of a crapshoot ahead of NFP tomorrow and the official participation announcement for the Greek Bond Swap, but reprice risk is marginally increasing as MBS are hitting new lows.
That would be more meaningful for us if it weren't late in the day on a roll day, but considering 10yr yields are also crossing into their highest highs of the day, as are stock prices, there is an outside chance a lender or two would reprice for the worse here.
That said, we're not talking about big shifts in range or sideways trends unless 10's are breaking 2.04's and MBS are breaking below 103-10.
That would be more meaningful for us if it weren't late in the day on a roll day, but considering 10yr yields are also crossing into their highest highs of the day, as are stock prices, there is an outside chance a lender or two would reprice for the worse here.
That said, we're not talking about big shifts in range or sideways trends unless 10's are breaking 2.04's and MBS are breaking below 103-10.
11:14AM :
ALERT:
MBS at Weakest Levels, Reprice Risk Rises, But May Be Temporary
The first caveat: reprice risk depends on whether or not a particular lender is out with rates and how conservative that rate sheet was versus yesterday.
The next caveat is that it's too soon to know whether or not current weakness will persist or if this is just the standard-issue, post-Fed-Buying spikiness that ultimately works itself out over the next hour.
To be clear, the spike higher in 10yr yields and lower in MBS prices was brought on by the culmination of Fed buying. It was heavily concentrated in a few of the offered buckets, leaving others holding bags that they're now apparently trying to get rid of. We think they'll probably be able to do that well enough with this little back up over 2% in 10yr yields and this won't materialize into some "runaway sell-off" without support from some Greek deadline headlines that are more convincing than the almost comically unnecessary "it's going well" that we got recently.
10yr yields are doing their best to hold under 2.01 and Fannie 3.5 MBS to hold 103-13 support.
UPDATE: following wire just crossed:
RTRS - - SENIOR GREEK GOVT OFFICIAL SAYS TAKE-UP IN DEBT SWAP EXCEEDED 70 PCT LATE LAST NIGHT
This is taking 10's over 2.01 as I write... Implied pressure on MBS, still holding 103-13 for now.
The next caveat is that it's too soon to know whether or not current weakness will persist or if this is just the standard-issue, post-Fed-Buying spikiness that ultimately works itself out over the next hour.
To be clear, the spike higher in 10yr yields and lower in MBS prices was brought on by the culmination of Fed buying. It was heavily concentrated in a few of the offered buckets, leaving others holding bags that they're now apparently trying to get rid of. We think they'll probably be able to do that well enough with this little back up over 2% in 10yr yields and this won't materialize into some "runaway sell-off" without support from some Greek deadline headlines that are more convincing than the almost comically unnecessary "it's going well" that we got recently.
10yr yields are doing their best to hold under 2.01 and Fannie 3.5 MBS to hold 103-13 support.
UPDATE: following wire just crossed:
RTRS - - SENIOR GREEK GOVT OFFICIAL SAYS TAKE-UP IN DEBT SWAP EXCEEDED 70 PCT LATE LAST NIGHT
This is taking 10's over 2.01 as I write... Implied pressure on MBS, still holding 103-13 for now.
Featured Market Discussion
A recap of the featured comments from the Live Discussion on the MBS Live Dashboard.
Adam Quinones : "Bond market is a mess. Traders totally tactical until stored energy is released."
Steven Stone : "if ur closing in march, id lock"
Adam Quinones : "I'd be strategically short right now..lock"
Tom Bartlett : "Any opinions on what rates do when Israel takes out Iran's Nukes?"
Tom Bartlett : "REPRICE: 3:47 PM - Stearns Lending Worse"
Tom Bartlett : "REPRICE: 3:46 PM - 360 Mortgage Worse"
Scott Valins : "REPRICE: 3:40 PM - Interbank Worse"
Ira Selwin : "As long as you can access MBSLive on the Ipad, what else matters "
Matt Hodges : "Emcompass has an app for iPad specifically?"
Ira Selwin : "The idea is great, just dont know know if it will work cross platform"
Ira Selwin : "Encompass does"
Ira Selwin : "Unless your system tracks all that AR"
Andrew Russell : "at least would be nice to take the ipad for an initial app, and show the credit report right on the ipad"
Ira Selwin : "that as well. I know Encompass pull dates on when disclosures are sent, etc..not sure how an app would intereact unless it was Encompass's own"
Matt Hodges : "it would be nice to just have a simple 1003, gfe and til open source that you can import into any LOS"
Ira Selwin : "The only question I would have about a newcomer to the disclosures is how compliant will things be and how often will updates be pushed ? "
Matt Hodges : "i've asked Calyx numerous times about it, nothing planned"
Justin Bayle : "slightly off topic, but I've talked to people here about this before, just thought I'd let you know the iPad 1003 loan app is coming soon: http://www.nationalmortgagenews.com/mt_features/new-ipad-mortgage-app-1029264-1.html?ET=nationalmortgage:e2499:76450a:&st=email&utm_source=editorial&utm_medium=email&utm_campaign=MT_Weekly_030812&site=default_tech"
Ken Crute : "Yorkie don't think they maintain an approved list any more, you run it thru the Condo Manager thing after you get the condo docs
"
Brent Borcherding : "No but US Bank will do 10% down, I believe, leaving them with enough reserves."
Jason Zimmer : "SunTrust, US Bank"
Lea Shaw : "anyone know of a lender that will allow 20% down and 1M"
Jason York : "anyone have a link to fannie and freddie approved condos?"
Jeff Statz : "https://www.efanniemae.com/sf/refmaterials/loanlimits/xls/loanlimref.xls or just download that"
Alan Craft : "https://entp.hud.gov/idapp/html/hicostlook.cfm"
Matt Devine : "what is the website to check conforming loan limits maximums for different counties?"
Matthew Graham : "correct AP"
Andy Pada : "so acquiescing to the loss"
Matthew Graham : ""how much they're willing to lose" has already been decided. In that sense, it's just a yes or no."
Andy Pada : "So in the end, this is all about how much private investors are willing to lose (but not really because they have insurance) when Greece defaults on its debt."
Matthew Graham : "if that happens, it's even more bond-market-negative. Again, at least in the short term, and again, to whatever extent the pre-NFP mindset would allow for"
Matthew Graham : "the more that willingly sign up, the less volatility created in markets. if the participation rate is over 90%, this will likely be marginally unfriendly to bond markets to whatever extent that will happen ahead of tomorrow's NFP. If voluntary participation crests 95%, I'm not aware of all the tools at the disposal of the private sector, but it's possible CAC's would not be activated at all"
Paul Carlin : "If some one cut my hair at this rate, I would only have knees and lower legs left"
Matthew Graham : "at participation rates above 75%, then Greece has not necessarily vowed to activate CACs, but to discuss that decision with Eurogroup (aka "public sector" which we reported earlier)"
Matthew Graham : "the CAC threats were largely "poker face" in my opinion, in order to motivate more willing participation."
Matthew Graham : "correct AP"
Matthew Graham : "if 66% opted in, Greece said it would activate collective action clauses to apply the haircut to all of it's bonds, essentially forcing the haircut on all holders of Greek debt"
Andy Pada : "opting in = accepting the hair cut %?"
Matthew Graham : "The time frame in which they can "opt-in" has been ongoing since last week and the deadline for them opting-in is today at 4pm."
Matthew Graham : "ok, Following the last major Eurogroup meeting with Greece (Eurogroup is essentially "the public sector"), the haircut %'s were decided for the private sector (banks, insurance funds, pension funds, investment co's) should they decide to voluntarily participate in having their Greek holdings written down. "
Andy Pada : "I'm lost here...can someone explain to me what hell is going on in Greece and how does that affect our rates?"
Victor Burek : "sure there will be some leaks"
Jeff Statz : "i wonder how long it takes after sign up finishes for markets to catch wind"
Jeff Statz : "investors have until 10pm local, but athens will announce the results early the following morning"
Matthew Graham : "so we're "in between" right now."
Matthew Graham : "From Reuters Y'day: "Athens has said it wants take up of over 90 percent and would abandon the deal if the rate fell below below 75 percent. It says it will consult with its public sector creditors if the acceptance rate falls in between. ""
Matthew Graham : "Deadline for Greek Swap is 4pm EDT"
Matthew Graham : "RTRS- SENIOR GREEK GOVT OFFICIAL SAYS TAKE-UP IN DEBT SWAP EXCEEDED 70 PCT LATE LAST NIGHT"
Matthew Graham : "RTRS - SENIOR GREEK GOVT OFFICIAL SAYS TAKE-UP IN DEBT SWAP EXCEEDS 75 PCT"
Matthew Graham : "yeah"
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