MBS Make Comeback. Reprices for Better Awarded

"Rate sheet influential" MBS coupons ended the day on a positive note...

FNCL 4.5s recovered from morning weakness and went out at session price highs and spread tights.  Reprices for the better were reported, leaving loan pricing largely unchanged on a day over day basis. Week over week, loan pricing got beat up pretty bad as stored energy (that MG discussed here)  was released in an originator unfriendly direction after benchmark 10s failed to breakout of the recent range. On average...rebate is 90.7bps worse than it was last Friday, which happened to be the best pricing we've seen since early December. Rebate on the 4.875% BestEx note rate is 75bps worse on average vs. last Friday.

For anyone following along at home here are my marks: Secondary Market Current Coupon = 4.171%. +70bps/10yTSY. +63bps/10y swaps. +210bps/5yTSY.

Below is a chart of the range we've been blabbering on and on about lately. We ended the week right back in the middle of it., leaving room for 10 year TSY yields to run 10bps in either direction without breaking the range. How fitting. It's almost like the spike in yields (release of stored energy) was the bond market's way of making room to churn tactical profits. Oh wait...that's what happens when you're stuck in a range and waiting for motivation. You churn profits however possible.....at least if you're a fast money trader or bored out of your mind.

NEXT WEEK: State of the Union, FOMC Meeting, Treasury Auctions, (lack of) GSE Reform Chatter, Earnings Galore, a busy economic calendar including Consumer Confidence, Home Prices, New Home Sales, Durable Goods Orders, and Q4 GDP. And last but not least...more range. All we can do is play it until it's no longer the range.

Go Jets? Go Bears? Packers? Dem Stillers? (No that was not a typo...it was my best Myron Cope impression.)

Have a good weekend.