MBS MID-DAY: Bond Markets Continue Losing Streak; MBS Underperform

By: Matthew Graham •

Treasuries were under pressure right from the start today, having begun their move weaker when European trading came online around 3am.  10's managed to bounce a bit before heading further sideways, but MBS didn't move as far away from their weakest levels of the day.  Fannie 3.5s are still off more than 8/32nds from many lenders' rate sheet print times and more than a few reprices have been reported.

There's no single event driving the weakness, though stronger-than-expected Wholesale Inventories didn't help this morning.  In general, bond markets are still in the selling trend leading back from the recent low yields seen in late May.  Despite some short term volatility around last week's key events, the moderate weakness since then effectively keeps that trend intact. 

This can be seen in the 3-month chart of 10yr yields below (which may or may not be from the soon-to-be-released MBS Live Dashboard.  Hey, does that say "real time chart #2" at the top?  I guess that means there's going to be more than one, right? ;) 

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 : -0-10
FNMA 3.5
101-32 : -0-12
FNMA 4.0
105-12 : -0-08
Treasuries
2 YR
0.4428 : +0.0198
10 YR
2.6384 : +0.0254
30 YR
3.4694 : +0.0184
Pricing as of 6/10/14 1:03PMEST
Morning Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
11:43AM  :  ALERT ISSUED: Negative Reprices Now More Likely
10:37AM  :  ALERT ISSUED: Negative Reprices Becoming More Possible
10:11AM  :  ALERT ISSUED: Negative Reprice Risk Already Approaching Depending on Lender
9:29AM  :  Bond Markets Holding Ground at Slightly Weaker Levels
Live Chat Featured Comments
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Jason Anker  :  "the word "waive" is suspect however from a legal perspective"
Jason Anker  :  "sounds like good marketing and LPMI on everything"
Gary Bracht  :  "Yesterday evening I was asked to compare a quote from a competitor and the borrower (conventional with 5% Down) was told by brand X that they "waive the mortgage insurance on loans with more than 5% down." I told him I've never heard of this and I'd encourage him to get this in writing and confirm with a supervisor to his LO. Or, maybe there is a new loan program out there and I just never heard of it. I wished him luck. "
Matthew Graham  :  "not that I'd want to see it today, but the next important test in terms of 10yr yields would be 2.66-2.67"
Gus Floropoulos  :  "Excellent technical analysis on "The Day Ahead"....charts for dummies"