MBS RECAP: Moderate Volatility In A Narrow Range

MBS Pricing Snapshot

Fannie 3.0s are up nearly three eighths of a point (10 ticks) at 104-24 at the moment as broader bond markets continue a somewhat choppy bounce back from the weakest levels of the month last week. This isn't appreciably higher than the 104-22 highs during rate sheet release times this morning, but it's not out of the realm of possibility to see a "stability reprice," and also near the best levels since the middle of last week.

Bond markets have generally been following the broader undercurrent of "risk-on vs risk-off" recently, as they've had little new information to inform trading levels. Stocks have plenty and are down big today. S&P futures currently trade at 1408 after hitting 1433 late last night.
br/>Despite the positivity for bond markets so far today, 10yr yields look to have bottomed out most meaningfully with the biggest bout of stock selling heading into 10:30am. We've been grinding extremely sideways wince then and would likely need to see a meaningful stock sell-off in order to retest those lower yields.

All of the above probably keeps a lid on Fannie 3.0 MBS at 104-26, which would need to broken in order to see widespread positive reprices. Still... We might see a few, but the overall theme is sideways and contained as we head into the close. As always, late day illiquidity can cause things to deteriorate into the afternoon, so with the firm bounce off the best levels earlier, we'd keep our guard up for afternoon weakness.