Reprice Risk Rising As Stock Lever Reconnects. Late Loan Pricers Most Likely to Recall

The Euro, Oil, and the S&P are adding to early session appreciations and interest rates are starting to suffer because of it.

After ignoring the equity rally for most of the day, the 10 year Treasury note has surrendered to the stock lever.  The 3.50% coupon bearing 10 year note is now -0-07 at 101-25 yielding 3.29%. The jump in yield played out in a thinly traded marketplace and seller volume picked up considerably into the downtrade...this made the move higher a bit more violent. 

The 10yr note trend channel is consolidating, indicating we are approaching a "crossroads". The defining moment: WHEN THE S&P hits 1108!!! If new money comes into the equity market and the S&P breaks the 200 day moving average, benchmark interest rates will rise and rate sheet rebate will get worse. The S&P is currently +13.99 (+1.28%) at 1103.62.

Mortgages are still holding their own but well off the high prints of the day. The FN 4.0 is -0-02 at 99-21. The FN 4.5 is -0-01 at 102-17. The secondary market current coupon is less than 1 bp higher at 4.058%. Yield spreads are firmer on the day but off their tights. Here is my current coupon scorecard vs. benchmarks: +76.8bps/10yTSY note yield and +69.4bps/10yIRS.

The later your lender published rate sheets today, the more likely they are to reprice for the worse. Fells Wargo should recall after their early morning pricing blunder.