MBS RECAP: Strong Week Ends With Moderate Correction

By: Matthew Graham •

The focus of the week for MBS and rates should be on the fact that we made it to levels not seen since the end of October 2013.  With 6 out of the last 7 days taking rates into better territory--not to mention with the utter defiance of last week's big NFP beat--it's only fair to expect a modest correction to big, strong winning streaks.

That's just what we had today as Fannie 3.5s and 4.0s are only off 6 and 3/32nds respectively heading into the last few hours.  Treasuries were slightly higher in yield, but ended up closing under a short term technical level at 2.625. 

There were no significant market movers in play today, leaving markets to act purely based on tradeflows and technicals--an ideal opportunity for the type of correction we saw.  The only risk is that today is also consistent with a broader correction to April's strength.  That could make next week challenging, especially if the economic data is stronger. 

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
97-22 : -0-07
FNMA 3.5
101-27 : -0-06
FNMA 4.0
104-29 : -0-04
Treasuries
2 YR
0.3830 : -0.0040
10 YR
2.6233 : +0.0213
30 YR
3.4651 : +0.0331
Pricing as of 5/9/14 3:11PMEST
Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
2:23PM  :  Bond Markets Finding Footing Into Afternoon Hours
1:00PM  :  ALERT ISSUED: Reprices Now moving from "possible" to "probable"
12:44PM  :  ALERT ISSUED: Negative Reprice Risk Increasing as Treasury Technicals Deteriorate
11:34AM  :  ALERT ISSUED: MBS at Lows; Potentially Holding Ground, but Some Reprice Risk
9:10AM  :  Bond Markets Slightly Weaker in Domestic Session
MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "RTRS - FED'S FISHER SUGGESTS DITCHING INDIVIDUAL POLICYMAKERS' "DOT CHART" FORECASTS ON RATES"
Matthew Graham  :  "RTRS - FED'S FISHER: DOTS ARE A FLAWED TOOL DUE TO GUESSWORK, CHANGING OF POLICYMAKERS"
John Tassios  :  "So far I agree with all of Fisher's points as outlined in chat box"
John Tassios  :  "the dot chart point is what I meant, of doing away with dot chart. I think is confuses markets"
Matthew Graham  :  "of course Fisher hates the dot charts! He was one of the worst forecasters since they started it! Yellen was the best. go figure."
Mitch Mitchell  :  "first time I've had this come up in a while. Borrower closing on new home purchase before current home sells. I know I need 6 month reserved on both properties. Can I use vested 401K and all that stuff. I'm a little short on using just checking, savings, and money market..."
Ted Rood  :  "Should be able to use 60%, MM, but have seen underwriters fuss because the funds may not be available unless he changes employment."
Clayton Sandy  :  " yes. Just need to kwow if he has access to those funds"