MBS MID-DAY: Tepid Gains Mostly Intact Ahead of 10yr Auction

By: Matthew Graham •

During yet another morning without significant events on the calendar, bond markets have finally found cause to end their 3-day losing streak.  To be fair, European bond markets found that cause, and Treasuries are simply watching and following. 

There will likely be a lot of talk about stock market weakness coinciding with bond market strength today.  It's true that stocks are playing something of a supporting role, but the clearest correlations are with European bond markets where new lows/highs in German Bunds have coincided perfectly with lows/highs in Treasuries. 

Treasuries may begin to break away and 'do their own thing' to some extent now as the European session is winding down and with the 10yr Auction approaching at 1pm.  MBS are underperforming just slightly, but have still managed to hold on to small gains.  Keep in mind that today's prices are lower than yesterday's due to the roll (i.e. today's prices for Fannie and Freddie 30yr Fixed MBS are based on July coupons while yesterday's were based on the soon-to-be-retired June coupons).

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 : +0-08
FNMA 3.5
101-29 : +0-05
FNMA 4.0
105-04 : +0-02
Treasuries
2 YR
0.4269 : -0.0121
10 YR
2.6186 : -0.0184
30 YR
3.4472 : -0.0198
Pricing as of 6/11/14 11:44AMEST
Morning Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
11:23AM  :  MBS Pull Back from Best Levels
10:45AM  :  Following Europe to Stronger Levels
9:21AM  :  Bond Markets Slightly Better Than 'Unchanged' With Some Help From Europe
Live Chat Featured Comments
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Jason York  :  "I did jsut find this in AllRegs - When a borrower’s interest in a property is bought out by another co-owner of the property, as often happens in a divorce settlement, but the lender does not release the borrower from liability under the mortgage, the borrower has a contingent liability. If the lender obtains documentation to confirm the transfer of title to the property, this liability does not have to be considered as part of the borrower’s recurring monthly debt obligations."
Matt Hodges  :  "12 months is the rule i understand, JY"
Jason York  :  "if someone is still on the mortgage with an ex, but not on the deed, is there any way to not count that payment against them by showing the ex has paid the mortgage out of her own account for the past 12 months? or any other ideas?"
Sung Kim  :  "mg quote in cnbc - "We could have held out some hope that markets were just digesting last week's big events and that rates might still snap back lower," wrote Matthew Graham of Mortgage News Daily in an analysis of the latest rate moves. "Today builds a case against any quick moves lower, and begins to make last week's only positive day for rates look like an outlier in an otherwise determined trend higher.""