MBS RECAP: Exceptionally Well-Contained After Morning Hiccup

MBS Live: MBS Afternoon Market Summary

The overall trading range in MBS was 6 ticks from peak to trough, but that doesn't really tell the story of the flatness.  With the exception of the first few trades of the day before the morning data gave bond markets a slight boost, and factoring out 1-2 outlying quotes, it was only a 3/32nds range...  That's narrow, but not at all out of line with the recent grind sideways-to-slightly-higher in MBS prices that's been intact since the beginning of last week.  Treasuries were contained as well, jumping back down in line with yesterday's high yields after weaker-than-expected Durable Goods and holding between there (1.71) and 1.693 for the balance of the session.  We continue to wait for some semblance of a challenge to these narrow sideways trends heading into next week's big-ticket events and continue being asked to wait another day.  Perhaps tomorrow morning's Jobless Claims and afternoon's auction cycle conclusion will be enough, but we're increasingly reminded that the range is the range, until it's not anymore.

Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.

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.

2:12PM  :  Freddie Mac: Loan Prospector Updates on June 23rd

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.

Rob Clark  :  "30 year only."

Rob Clark  :  "REPRICE: 3:32 PM - Provident Funding Better"

Andy Pada  :  "I think that is the lender's ability to "pay the borrower $500.00" to do a refinance"

Sam  :  "one of the harp flyers mention $500 off closing cost...i assume they're referring to the appraisal waiver?"

Gaius Rossini  :  "by HARP they mean >80 LTV though, there's more <80 LTV I think that still qualify, though solicitation rules are different there"

Gaius Rossini  :  "according to the tsy, another million borrowers or so eligible for HARP"

Andy Pada  :  "GR, do you know the % or # of loan still eligible for HARP?"

Gaius Rossini  :  "and demarco brought it up twice, once to the house and once to the senate iirc"

Gaius Rossini  :  "doubtful. this isn't exactly of congressional testimony"

Andy Pada  :  "so is this the big marketing push by FHFA for HARP?"

Matthew Graham  :  "yeah... I probably would have gone more "official" with something like that, as opposed to "postcard marketing""

Gaius Rossini  :  "not to be pessimistic but it looks like it was designed to look like junk mail... pretty sad."

Gaius Rossini  :  "https://www.fanniemae.com/singlefamily/harp-consumer-outreach-materials"

Gaius Rossini  :  "have you guys seen the new HARP solicitation material from fannie?"

Matthew Graham  :  "Also, when big moves or breaks away from long-standing ranges are at stake, 10's tend to offer a better indication of those broader shifts. That's not to say that we can't observe the same "stuff" in MBS, just that you can usually observe it better in 10's as long as you're mindful of the instances when they diverge (like QE3, as MH suggests)."

Matthew Graham  :  "I've sort of come full circle on the 10yr thing Robin. Of course it's MBS that dictate rates, but from moment to moment, 10's are a more liquid, more actively traded, more well-behaved from a technical standpoint than MBS. They also have the benefit of more transparent overnight trading and an active futures market. In my opinion, it's good to keep a close eye on both, ESPECIALLY when spreads begin to cause deviations in performance. When spreads stay reasonably level, the 10yr is my benchma"

Victor Burek  :  "treasuries, esp. 10yr is like the person holding the leash, the dog has some room to move in any direction but at the end of the day, the dog will follow the person with the leash"

Matt Hodges  :  "with QE and twist, that correlation is less tied, and watching MBS coupons is much more important"

Victor Burek  :  "mg had a great explanation about it a while back, using a leash and a dog as an analogy"

Matt Hodges  :  "Robin, prior to QE, i'd argue that myth was fairly accurate. "

Victor Burek  :  "mbs generally follows the 10yr"

Robin Baran  :  "I constantly learn from this site and find great value to it, but isn't one of the main myths out there is that mortgage rates correlate to the 10 year yield? I thought we were to be concentrating on Mbs so why the focus on the yield? "

Victor Burek  :  "i know...just saying, we dont need to break below 1.70, but would like to break below 1.70"

Matt Hodges  :  "not necessarily... if purchase biz picks up, and it is on a faster track here than last year, more purchase biz would allow greater income"

Victor Burek  :  "do you need to make the amount of money you did last year? probably no, would you like to make more than you did last year, probably yes"

Brayden Alexander  :  "i'd prefer to clear an close my pipeline before any breakout lower. "

Matt Hodges  :  "Oliver, to be blunt, who cares? rates are great - do we need to break lower?"

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