MBS LUNCH: Drifting About the Range
Tick toc tick toc tick toc tick toc tick toc....(hear it in your head)
Slow flows or not...we know how you love GREEN.
Ignoring the volatile story our charts tell, its been an uneventful day in secondary mortgage markets. Nonetheless FN 4.5 GREENS are currently outnumbering the FN 4.5 REDS. YAY for potential reprices for the better! Actually certain price leader types have already passed along a little love to your rate sheets. Other mortgage bankers are doing as we expected...maintaining status quo until full strength is restored and the penalty killing unit comes off the ice. (HAHA get it? MAN DOWN???) I think I might be reaching a bit now...there really isnt much to say. Im trying...
Enjoy the GREEN for now....
Summertime status quo seems to be the theme in the rates market. The 10 yr TSY note yield has been happily range bound between 3.45 and 3.50 since early yesterday afternoon. Trading volume is well below average in the interest rate futures market. Currently 520,000 in SEPT 10 yr.
Meanwhile stock traders have left......(no really they have left)...leaving the S&P to drift just above 1,000...in a tight range! This implies no trend bias...just a drift.
I hope my point has been made...RANGE BOUND. Summer trading flows. Sleepy. Nap. Vacation. Out of Office.
Not getting too comfy with the green though. 100-07 to 100-10 has recently served to trigger the forces of PARNERTIA....pulling prices back towards 100-00. BUT...if benchmark TSYs can maintain their position in the bullish side of the recent range, near 3.45, perhaps we see MBS doing a little drifting of its own?
p.s.....
to help you think through your pipelines in the context of all our recent discussions, we got you a poster.