MBS RECAP: Healthy Dose of Volatility for Bond Markets Thanks to Ukraine

By: Matthew Graham •

Bond markets started the day in fairly decent shape, not much changed following yesterday's substantial Ukraine-inspired improvement.  Domestic economic data was shunned as Geopolitics continued to dominate today's landscape though the action was much less one-sided.

In fact, there were 4 big reversals (at least 6/32nds each time) between positive and negative territory for MBS before noon!  You could count the number of times that happens in a year on one hand.  Thankfully today's iteration began with a rally into the week's best levels and managed to stay mostly sideways.

The near-term focal point continues to be Crimea's referendum on Sunday, deciding whether or not to become part of Russia.  From there, the resulting domino affect of US/EU responses and Russia/Ukraine responses to those responses will flesh out the rest of the story.  In general, the more we're moving away from Cold War 2, the worse it will be for rates. 

MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
MBS
FNMA 3.0
96-28 : -0-08
FNMA 3.5
101-02 : -0-06
FNMA 4.0
104-13 : -0-05
Treasuries
2 YR
0.3424 : +0.0004
10 YR
2.6525 : +-0.0005
30 YR
3.5957 : -0.0053
Pricing as of 3/14/14 4:33PMEST
Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
3:05PM  :  Drifting Toward Weekend Near Lows; Reprice Risk Remains
12:04PM  :  ALERT ISSUED: Swinging Right Back in the Other Direction! (Negative Reprice Risk is Back)
11:20AM  :  Reprice Risk Ebbs as Bonds Bounce Back
10:46AM  :  Why are Bond Markets Losing Ground This Morning?
10:06AM  :  ALERT ISSUED: Bond Markets Weaker before and after Sentiment Data;Negative Reprice Risk Increasing
9:12AM  :  Stronger Open on Putin 'Invasion' Wire, met with Resistance
MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Scott Ward  :  "Geopolitical - Ukraine is ranked as the world’s sixth-largest arms exporter. The former Soviet republic inherited a substantial portion of Moscow’s weapons expertise and military industry: About 30 percent of all Soviet defense industries are located inside Ukraine."
Stephen Mitroka  :  "Can anyone confirm if FHA doesn't allow netting of escrows off an exsisting FHA loan if the case number was assigned after 11/1/2013? I am trying to refi a client out of an FHA into a conventional. Thanks for the help"
Sung Kim  :  "sm - that is servicer specific"
Sung Kim  :  "it's an FHA rule ONLY for FHA loans"
Stephen Mitroka  :  "SK - so if I was going from FHA to conventional thsi rule wouldn't apply?"
Sung Kim  :  "it should not SM, that being said, very few servicers net, so it's usually the title company taking the risk and making the borrowers sign something at settlement"