• Bonds start strong.  Good MBS gains and a few positive reprices early
  • Everything went south as oil jumped off lows
  • Stocks jumped even higher and bonds were forced to go along with the "risk-on" moves.
  • Fannie 3.0s end an eighth lower at 102-14--almost a half point drop from the highs.

Bond markets began the day in strong territory, building on yesterday's positive reversal.  10yr yields were several bps lower at the open and bonds continued to rally through 10:30am.  Incidentally, the 10am economic data was NOT a factor in the bond market strength.  New Home Sales came in much weaker than expected, but it was really the 9:45am Markit Services PMI that gave the bond rally its final push of positive momentum.

The market data was a blessing and a curse for bonds because it served as a trigger point for traders to take their chips off the table and reshuffle the cards.  As the new hands were being dealt, stocks and oil were beginning to move higher.  Bonds were also thinking about the 1pm Treasury auction (it's always easier for traders if yields move higher into an auction).  

By 2pm, most of the day's bond gains had been erased by the strong move in stocks, but the volatility was just getting started.  Stock prices blasted higher, more than doubling the initial move off the lows.  Bonds were forced to follow, with 10yr yields ultimately losing more than 3bps and Fannie 3.0s falling an eighth of a point day-over-day.  

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
102-14 : -0-02
Treasuries
10 YR
1.7520 : +0.0070
Pricing as of 2/24/16 5:43PMEST
Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
2:40PM  :  ALERT ISSUED: Negative Reprices Now Becoming Likely
1:09PM  :  ALERT ISSUED: Negative Reprice Risk Increasing For Some Lenders
11:53AM  :  ALERT ISSUED: Reprice Considerations if Pull-Back Continues
9:51AM  :  Bond Markets Pushing Best Levels Thanks to Unlikely Suspect
MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Dominick Cordone  :  "just locked 5 if that helps you"
Mike Christensen  :  "I would lock Tony."
Tony Garcia  :  "hmmm. to lock or not to lock. Have a couple floating within 30 days. One is a few days away from 15 day lock."
Bryce Schetselaar  :  "reprices incoming"
Andrew Horowitz  :  "and because the S&P was down 27 earlier and now down 5"
Matthew Graham  :  "because the auction wasn't ever probably going to be a market mover. Very few auctions are any more, and even when it seems like they are, it's usually not a direct result of the auction statistics, but rather, simply the fact that it has passed and traders can reshuffle their positions (primary dealers are forced to bid at auction)."
Jon Leslie  :  "MG why the other way with a B+"
Jeffrey Wood  :  "Thank you MG. This service just paid for itself today. And I'm still on the free trial, lol. Love it!"
Jeffrey Wood  :  "As a brand new user of MBS Live I gotta say this is awesome. Just panic locked 3 loans and my colleague kicking himself because two lenders just re-priced worse."
Edgar Young  :  "so the FED is confused....;-)"
Jeff Anderson  :  "Today's Captain Obvious winner?"
Matthew Graham  :  "RTRS - DALLAS FED'S KAPLAN SAYS MONETARY POLICY MORE COMPLICATED OVER NEXT SEVERAL YEARS"
Matthew Graham  :  "everyone sitting down?"
Matthew Graham  :  "Strong B+. Can't give it an "A" with the sell-off required to hit these numbers"
Matthew Graham  :  "Indirects 67% vs 56% average."
Matthew Graham  :  "bid-to-cover was right in line with average"
Matthew Graham  :  "the 1pm when-issued yield was 1.182"
Matthew Graham  :  "RTRS - U.S. SELLS $34 BLN 5-YEAR NOTES AT HIGH YIELD 1.169 PCT, AWARDS 41.43 PCT OF BIDS AT HIGH"