MBS RECAP: Prices Hold Steady After Morning Sell-Off
By:
Matthew Graham
•
MBS Live: MBS Afternoon Market Summary
The closer and closer we get to 5pm, the more it seems that this morning's ISM-inspired sell-off will simply be an "adjustment" that exchanges the previous narrow, sideways range, for another. Specifically, we notes the narrow range between 103-26 and 103-28 yesterday. Then, after this morning's sell-off, Fannie 3.5 MBS hit 103-22, and although there have been a few brief tests on the low side of that range, prices have held within 103-22 and 103-24 for the rest of the day. This is somewhat comforting considering that further weakness seemed at risk as we approached 3pm, and reinforces the constant theme of "waiting on Friday NFP with potential for moderate movements in the interim."
MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
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Afternoon Reprice Alerts and Updates
Below is a recap of instant Reprice Alerts and updates issued via email and text alert to MBS Live subscribers this afternoon.
3:25PM :
FHFA Responds to Representatives Cummings and Tierney
Federal Housing Finance Agency Acting Director Edward J. DeMarco today responded to a May 1 letter from Representatives Elijah Cummings and John F. Tierney
about principal forgiveness. As part of the response, FHFA is releasing an April 12, 2012 letter and summaries of principal forgiveness pilot programs.
2:36PM :
ALERT ISSUED:
Sideways Grind and Possible Weakness Into Treasury Close
Ever since the brief sell-off that followed this morning's ISM data, bond markets have done a good job of finding and holding their footing at slightly weaker levels. For Fannie 3.5 MBS, that's been between the 103-22 support level and 103-24. 10yr yields have been roughly contained by 1.95 and 1.96
As of this moment, 10's just tested into 1.96 territory for the first time today, painting the "sideways" theme with a few brushstrokes of additional weakness. If it translates to MBS enough to push 3.5's below 103-22, negative reprice risk would be increasing.
As of this moment, 10's just tested into 1.96 territory for the first time today, painting the "sideways" theme with a few brushstrokes of additional weakness. If it translates to MBS enough to push 3.5's below 103-22, negative reprice risk would be increasing.
11:38AM :
NAR: Latest 2012 Economic and Housing Outlook
The housing market forecast has been upgraded based on a rise in pending contracts and continued moderate economic expansion. Here is the latest 2012 Economic and Housing Outlook from NAR Chief Economist Lawrence Yun. The full report looks at economic indicators such as existing home sales, new home sales, housing starts, GDP, payroll jobs and more.
The Summary Forecast Table is show in the report below:
Full Report
The Summary Forecast Table is show in the report below:
Full Report
Live Chat Featured Comments
A recap of the featured comments from the MBS Live Dashboard's Live Chat feature, utilized by hundreds of industry professionals each day.
Matt Hodges : "joe - start with ML 12-4"
Paul Carlin : "http://portal.hud.gov/hudportal/documents/huddoc?id=12-04ml.pdf"
Joe Probst : "on newer loans are the upfront going back down to 1.10 and monthly 1 ?"
Victor Burek : "REPRICE: 3:14 PM - Nexbank Worse"
Jeff Statz : "FNMA pricing terms update: https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2012/sel1203.pdf"
Jeff Anderson : "Last months deal came with a lifetime supply of paper towels."
Michael Gannon : "just saw a great deal at Costco.....case of butterfingers along with a free appraisal and a coupon for 20% off next months mortgage payment"
Eric Franson : "I was about to translate that for you MG"
Matthew Graham : "usually™"
Matthew Graham : "all things being equal, yes."
Matthew Graham : "Not necessarily Terry, but historically, stock prices and MBS prices do tend to move opposite each other. The magnitude of that inverse correlation is highly variable though. "
Eric Franson : "Good timing MH."
Terry Welch : "noob here - an equity sellof next week would mean these prices will go up, right?"
Matt Hodges : "just got notice after i locked"
Ira Selwin : "You wont be able to lock with it MH"
Ira Selwin : "REPRICE: 2:46 PM - Franklin American Worse"
Matt Hodges : "i have live pricing right now from 9:35 Eric"
Eric Franson : "REPRICE: 2:40 PM - Wells Fargo Worse"
Jack Shotbolt : "From your mouth to Gods ears Brent!"
Brent Borcherding : "Today seems like a last pump up to new 4 year highs, then...."
Brent Borcherding : "Equities start selling next week. Just a head's up."
Matthew Graham : "Lockhart repeats: 'OPERATION TWIST' CAN END IN JUNE AND MARKET CAN ABSORB IT 'WITHOUT MUCH INCIDENT' IN RATES - RTRS"
Michael Mitchell : "REPRICE: 1:18 PM - Suntrust Worse"
B-C : "if they were to service the loans then you could say they know something"
Brandon Blue : "I also heard Costco was going to be selling Ocean front property in Arizona"
MMNJ : "they do nto service -- and BTW, the Costco / FCB alliance has existed for the last 3 yrs....."
Ira Selwin : "Is that headline a joke? Good news for housing recovery? Someone want to let them know Costco isn't lending the money"
Matthew Graham : "and my response would be: Really realestateinsidernews? Really!? This, then, is the straw that breaks the camel's back? This is the proof of the recovery? This?!"
Matthew Graham : "That's what I think you wanted to do TB"
Matthew Graham : ""Costco is now ‘selling’ mortgages.
Smart move. Afterall, Costco has millions of folks visit their stores on a regular basis. Offering home loans makes sense.
This is also good news for the overall housing recovery…why? What this move signifies is that one of the worlds largest retailers believes that the real estate crash must be over or they wouldn’t venture into selling loans. You can be assured that Costco did extensive research before they decided to get into the Mortgage Business.""
Tom Bartlett : "here is a link to the story for you Jeff. http://realestateinsidernews.com/financing/costco-now-offering-home-loans-video/. It does not copy well for me. sorry."
Andrew Peterson : "REPRICE: 12:34 PM - Fifth Third Mortgage Worse"
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