MBS MID-DAY: Healthy Improvements Leveling Off Ahead of Auction
By:
Matthew Graham
•
MBS Live: MBS Morning Market Summary
Take note of the timestamp in the table below as things have changed somewhat from 11:09am EST. Bond markets put in good gains at the outset this morning after weakening somewhat overnight. Looking at the whole week's movement in Treasury yields (including overnight hours), 1.787 clearly looks like a technical ceiling that was "tested" this morning. From a technical perspective, "tests" are sort of like exploratory missions to a new frontier. If they're successful, they might set up camp, but if rejected, the frontier is at least temporarily solidified as a boundary. Think of that boundary as 1.787 this morning. Yields made it as high as 1.80, but decided not to set up camp there and very quickly moved back inside the 1.787 boundary before waiting for their next cues (which are recapped in this morning's latest MBS Live update, available currently on MBS Live or at the end of the day on this site). The move progressed fairly well back into positive territory, but looks to be leveling off at the moment. The next (and only) major event of the day arrives at 1pm with the 10yr Treasury auction.
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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Morning 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 morning.
9:25AM :
Treasuries Erase All Overnight Losses, MBS at 2-Day highs
The overnight session was reasonably placid for Treasuries with 10's improving less than a bp at the start and then holding between there and yesterday's supportive ceiling (1.786) through the US open. Volume and weakness picked up into the CBOT open (Treasury/Equities futures floor trading - 8:20am NY time) at which point we've seen a full scale reversal.
10's charged lower to 1.773 (where "charged" is an especially relative term, due to the week's light volume so far), taking out the entire move higher overnight and turning positive in the process.
MBS had opened in similarly weaker territory at 103-27 and made a similar move into positive territory. But in the case of MBS, we're back to yesterday's highs at 104-00.
The faster-paced morning moves coincide with a pick-up in selling in equities futures where the S&P is down 2.25 points vs yesterday's 5pm all-time highs. There's no significant data on the calendar this morning, though this afternoon's 10yr Treasury auction has the potential to motivate some movement. That's at 1pm.
10's charged lower to 1.773 (where "charged" is an especially relative term, due to the week's light volume so far), taking out the entire move higher overnight and turning positive in the process.
MBS had opened in similarly weaker territory at 103-27 and made a similar move into positive territory. But in the case of MBS, we're back to yesterday's highs at 104-00.
The faster-paced morning moves coincide with a pick-up in selling in equities futures where the S&P is down 2.25 points vs yesterday's 5pm all-time highs. There's no significant data on the calendar this morning, though this afternoon's 10yr Treasury auction has the potential to motivate some movement. That's at 1pm.
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 : "thanks, JA and SC... my thought is there's no way to do R/T and get cash back in this deal. I just can't find fannie guides on it. emailed an u/w - will let you know what i find out"
Steve Chizmadia : "NOO though JA, Cash out will be very restrictive with respect to LTV "
Jason Anker : "MH - I get unpaid invoices from those contractors so construction funds can be used. I think you are doing end loan so I think what you want to do is cash out. Borr needs to use up construction loan money for that. "
Matt Hodges : "u/w question - on a R/T take out of a construction loan for NOO property, can the borrower be reimbursed (greater than $2000) for hard out-of-pocket expenses, like survey, title update fees, well/septic install, etc?"
Ira Selwin : "something about letting neighbors borrow them?"
Mike Drews : "that's funny"
Matthew Graham : "RTRS- ECB'S MERSCH - ECB STILL HAS TOOLS LEFT IN ITS TOOL BOX "
Niccolo Satullo : "I've had single family home in CT get all screwed up with VA because they considered the development condos "
Jason Anker : "long day indeed, I need my CLTV back to 80% from 70% (condo) or my No-Contigency deal is going to blow up. "
James Barnes : "lol...gonna be a long day Jason."
Jason Anker : "stargin my day arguing that a rowhouse (detached) is not a condo"
Jeff Anderson : "GM, all. MBS rally to commence on Thursday at 1:01pm after supply for "
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