MBS RECAP: Constant, Slight Selling Pressure Adds Up By Close

By: Matthew Graham •

The day started out inoffensively enough with MBS and Treasuries only down slightly from Friday's latest levels.  Those were also incidentally the best closing levels of the year for MBS apart from 2 days at the end of May, and well into the best levels for Treasuries.  That, perhaps, serves to help temper the frustration that comes from a "down" day.

The moderate opening weakness simply stayed intact all day long.  There were no headline motivations during the domestic session, though cases can be made for a few soothing snippets on the Ukraine situation, and slightly stronger Homebuilder confidence.

More than anything, this is just the sort of selling pressure we expect to see when bonds have rallied hard on geopolitics and then the geopolitical headline die down.  Fannie 3.5s ended up losing 10 ticks by the end of the day and 10yr yields were up nearly 5bps to 2.394.

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
98-29 : -0-13
FNMA 3.5
102-17 : -0-10
FNMA 4.0
105-20 : -0-07
Treasuries
2 YR
0.4190 : +0.0080
10 YR
2.3940 : +0.0490
30 YR
3.1980 : +0.0640
Pricing as of 8/18/14 5:22PMEST
Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
4:29PM  :  ALERT ISSUED: Slightly Increased Negative Reprice Risk Into Close
1:19PM  :  ALERT ISSUED: Negative Momentum Continues After EU Close; Some Negative Reprice Risk.
10:29AM  :  ALERT ISSUED: Slight Pressure into Stock Market Open, On the Edge of Negative Reprice Risk
9:24AM  :  Bond Markets Pull Back Slightly as Flight-to-Safety Pauses
MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Bryce Schetselaar  :  "Scott--I believe that it depends on the lender. Some will do less than 6 months"
Scott Valins  :  "VA IRRRLs now require 6 months of payments before refi eligible?"
Jeff Anderson  :  "Just got info that Chase is 640."
Jeremy Bittner  :  "Does anyone know what lender will do a USDA loan at 600 besides Pacific Union?"
Matthew Graham  :  "Hey, look at it this way... In late 2013, we would be pretty stoked for the opportunity to be bummed that Fannie 3.5s were down 11 ticks on a Monday to the mid 102's! (they were at low 99's then). "