MBS RECAP: Despite Tons of Data, Greece Remains Dominant Market Motivator
By:
Matthew Graham
•
MBS Live: MBS Afternoon Market Summary
Today we got to see just how inconsequential our domestic data can be in the face of global financial hyperfocus on the good old Hellenic Republic, aka Greece. Interestingly enough, domestic data DOES matter, as seen in the small, brief reaction to the several pieces of data at 8:30am. It's just that it doesn't matter nearly as much as Greece as seen in the highest volume and sharpest move of the day following the announcement that efforts to form a Greek government had failed and that the country would be going to elections. We wonder, openly, does this mean that markets are to be range-bound near current levels until markets get confirmation that Greece isn't going to do anything stupid or crazy? Perhaps a better question is "what would it take for domestic bond markets NOT to maintain a current range at rock-bottom yields, between now and the time we can get confirmation that Greece is honoring austerity commitments or is otherwise simply rocking the Euro-zone boat but not actually tipping it over?" For now, it looks like markets are in "wait and see" mode, but there is a decent "domestic data contender" tomorrow in the form of April 25th's FOMC Meeting Minutes.
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.
3:40PM :
ALERT ISSUED:
MBS Hit New Record Highs as TSY Yields and Stocks Hit Lows
Stocks are at their lowest prices since early February and 10yr Treasury yields their lowest in over 6 months. Meanwhile Fannie 3.5 MBS hit a new ALL-TIME high moments ago, hitting 104-11. Bid-side demand is actually staying fairly strong at these levels, and while pricing is already reasonably in line with day-over-day price changes, it's not out of the question that we'd see a positive reprice from one or two of the "early crowd" lenders. This isn't likely to be a widespread phenomenon if it happens at all. The more important thesis of this message is that there is little risk of negative reprices as far as MBS prices would indicate (we can't speak to "pipeline control" reprices, which are a possibility in the current market).
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.
Brent Borcherding : "We're only 4 innings into a 9 inning ball game, it's hard to say with much certainty where anything will go. Though I don't believe under 1 is possible, but thought I'd use as a reference point."
Andrew Horowitz : "i said that earlier this year and still stand behind it"
Andrew Horowitz : "i look at our ten year 1.5"
Andrew Horowitz : "and I don't think we even head down to match the current Bund"
Andrew Horowitz : "we are not going down to that level BB"
Brent Borcherding : "Japanese 10 yr at .85"
Matt Hodges : "plenty of room for them to run lower"
Matt Hodges : "Can he not see where the German bund and our 10 year are compared to the problem children's bond yields?"
Andrew Horowitz : "he won't lose as much this time"
Brent Borcherding : "Gross out again calling for the end of the UST Bull run."
Chip Harris : "Nice support going back to yesterday at least at 104-06 it looks like"
Brent Borcherding : "I wonder if that has anything to do with the expediency of the repo process with cars and the lack thereof with homes."
BVG : ""You can live in your car if you don't pay your mortgage," said Ally CEO Michael Carpenter. "I don't mean to be cute, but the fact is people make their car payment before they pay their mortgage." ---Guess that mortgage gig wasn't so hot 'eh Michael?"
Clayton Sandy : "Chris, I just had one that will be three years in July. Got a refer with caution IV from DU"
Adam Quinones : "...without the dealers, who are utilizing too many resources on Dodd-Frank, reform won't happen in next five years."
Matthew Graham : "also, under 'goal 3,' "Implement the Home Affordable Refinance Program 2 (HARP 2.0) and implement and refine loan modification and refinancing initiatives as needed." But I'd guess as of right now, that's "as Demarco thinks is needed, and not at all like the recently proposed legislation." but a guy can dream."
Adam Quinones : "thank you Dodd-Frank!"
Adam Quinones : "OVER"
Adam Quinones : "5 years"
Matthew Graham : "re: http://www.mortgagenewsdaily.com/05152012_gse_conservatorship.asp . What's the over/under on how long it takes to see "Frannie Mac?""
John Paul Mulchay : "Theoretically, yes. All AUS driven so you have to run it. "
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