Bond markets finally did what they've wanted to do for several sessions now: square up some of the trading positions from the recent rally. That rally began on July 14th, making it the longest positive trend of 2015 by last week.
As any rally in any market continues, there's an ever-increasing risk or likelihood that it will experience a correction or consolidation. This one was no exception, and it increasingly seemed to be resisting further improvement as of late last week. On several occasions, I noted that it would take an ever-larger amount of outside justification for the bond rally to continue. In other words, it was a "hungry" rally.
Had it not been for Monday's record-setting weakness in global equities markets, we likely would have seen a bounce in bonds yesterday. Even with the external volatility, bonds only managed to end the day with modest gains.
That set the stage for today's heavier selling. All it took was for global markets NOT to begin the day in panic mode. Bonds quickly set about the task of booking profits and adjusting positions from the recent rally. It was a purely corrective movement, and doesn't hold any clues as to whether or not there's more weakness to follow.
MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom.
Real time pricing is available via MBS Live.
| MBS | FNMA 3.0 100-32 : -0-09 | FNMA 3.5 104-01 : -0-07 | FNMA 4.0 106-14 : -0-04 |
| Treasuries | 2 YR 0.6090 : +0.0290 | 10 YR 2.0780 : +0.0660 | 30 YR 2.8084 : +0.0754 |
| Pricing as of 8/25/15 5:55PMEST |
Today's Reprice Alerts and Updates
2:58PM : ALERT ISSUED: If you haven't seen a reprice yet, you will
12:41PM : ALERT ISSUED: Negative Reprices Increasingly Likely
11:16AM : ALERT ISSUED: Negative Reprice Risk Increasing For Some Lenders
9:58AM : China Rate Cut Sends Global Markets Back in Other Direction
MBS Live Chat Highlights
Michael Baker : "MG you made me look like a hero...sent out many of the updates from MBS Live yesterday and encouraged locks in the AM. Just got a pat on the back from two ASM's....all because of you and boards chatter yesterday! (Thank You!)"
Matthew Graham : "RTRS- CITI IS STICKING WITH SEPTEMBER TIMETABLE FOR FED RATE HIKE - CNBC"
Matthew Graham : "RTRS- JPMORGAN SAYS ODDS OF FED RATE HIKE IN SEPTEMBER HAVE DROPPED BELOW 50 PCT PERHAPS TO AROUND 35-40 PCT, BUT CHANCES STILL QUITE HIGH FOR RATE HIKE THIS YEAR"
Brent Borcherding : "Still fully expect stocks to sell off into the close, and rates really seem to be getting ready for the big run. "
John Tassios : "Yesterday was an abrupt fear bond safety rally that would come back out sooner or later. But, fundamentals catching up to stock mkt. Stocks will fall more in coming weeks and months overall to adjust to current economic data. Longer ended TSY's will be well bid rest of 2015 and MG's chopsticks will hold downline trend. Just my 2 cents."
Ted Rood : ""Income from a non-borrower household member can be considered to determine an applicable debt-to-income ratio for the loan, helping multi-generational and extended households qualify for an affordable mortgage." Bet documenting that will be fun."
Hugh W. Page : "Non occupying co-borrower flexiblilty too"
Ted Rood : ""and eliminates or caps standard loan level price adjustments" That could be a game changer.."
Michael Baker : "Has total score card tightened up lately? (Our sales team seeing almost 100% refers for scores between 620-639, where as just a few weeks ago if DTI under 43% you could get an Approve/Eligible)"
Hugh W. Page : "Good stuff CS"
Sung Kim : "in order to use income that is higher than average of 2013 and 2014 you need an audited P&L"
Mitch Mitchell : "I have a contractor who has been in biz for 17 years, whose income was down last year due to taking care of ailing family member for basically half the year.... On FHA is there Any way to use his income from 13, 14 and YTD for 15? Any other ideas besides waiting til next year to file taxes?"
MBS Market Alerts
