MBS RECAP: Snowball Selling In Bond Markets Ahead Of EU Summit
By:
Matthew Graham
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MBS Live: MBS Afternoon Market Summary
Although there's no way to know whether or not history will repeat itself this time, we've seen this pattern of behavior before where markets make big "risk-on" moves ahead of one of the semi-annual EU Summits. And a big risk-on move is exactly what we got today. Even though Housing Starts were surprisingly strong this morning, that merely added to a trend that was already in progress from the overnight session. It seemed for a moment that bond markets would try to fight back from the initial selling that followed the report, but as traders looked around to see if anyone was interested in moving lower in yield (figuratively), it soon became apparent that no one was, and the selling ensued from 10am on... Things were particularly bad for Treasuries and although Fed buying continues to keep MBS relatively more insulated, it was little consolation into the less-liquid afternoon hours, ultimately resulting in MBS losing half a point to head for the doors around 104-10 to 104-12 in Fannie 3.0s. 10yr yields moved up over 1.8185 in after-hours trading.
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.
2:06PM :
ALERT ISSUED:
MBS Revisit Lows Of The Day, Negative Reprice Risk Still Out There
After fighting their best fight to remain sideways versus a relative onslaught of selling in broader bond markets, MBS are slowly giving up ground in bits and pieces. The latest bit and or piece takes prices back to their lows of the day.
The possibility of negative reprices had been sort of a lingering, lurking possibility as we languished sideways near the lows, but now that we're breaking into new lows, the risks increase incrementally with each additional tick lower.
Fannie 3.0s are down 11 ticks at 104-16 at the moment, after hitting 104-17 earlier this morning. 10yr yields are up almost 8 bps at 1.799. Markets look to be circling the wagons ahead of tomorrow's big ticket events.
The possibility of negative reprices had been sort of a lingering, lurking possibility as we languished sideways near the lows, but now that we're breaking into new lows, the risks increase incrementally with each additional tick lower.
Fannie 3.0s are down 11 ticks at 104-16 at the moment, after hitting 104-17 earlier this morning. 10yr yields are up almost 8 bps at 1.799. Markets look to be circling the wagons ahead of tomorrow's big ticket events.
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.
LSP : "REPRICE: 3:01 PM - Franklin American Worse"
LSP : "REPRICE: 3:01 PM - PennyMac Worse"
BVG : "REPRICE: 2:52 PM - Interbank Worse"
Jason Adams : "REPRICE: 2:52 PM - Platinum Mortgage Worse"
Matthew Graham : "oh hey William, just getting back to the desk, but to add to the reprice levels discussion: http://mbslive.mortgagenewsdaily.com/knowledgebase/articles/22531-reprice-alert-levels"
Ray J : "i use +/-4"
Matt Hodges : "William - i wouldn't say "i just have to get use to this site." You will find that MBS Live invaluable, once you explore it. A good community of experts in here."
Adam Quinones : "hover over it and click "Edit My Alerts""
Adam Quinones : "William ---see "My Alerts" at the bottom of the dashboard."
Steven Bote : "click my alerts towards the bottom of the page"
William Hansen : "How do you set up the notices. Do thye have a help desk?"
William Hansen : "I always used bloomberg site for the mbs becuase it was free. Thye did away with it recnetly and i just have to get use to this new site"
Jason York : "@William, I have my notifications set up for +8 and -6, which seem to be good reprice estimates"
Michael Stark : "Hey Jason W - the client I sent to you for the VA IRRRL? Closed quickly and was SUPER happy. Thank you very much, that made me look good."
Victor Burek : "also depends on when your lender issued rate sheets"
Alan Craft : "And the change is from when that lender initially set pricing for the day"
Jason Wilborn : "6-8 ticks either direction usually will generate something "
Jason Wilborn : "depends on the lender"
William Hansen : "New to site how much of a change in the MBS will justify a price change? "
Jason Wilborn : "we could creep back up above 2% on the 10 year in my opinion"
Jason Wilborn : "I think DOW and S&P reach new all time highs and you see profit taking in bonds the last quarter of the year"
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