MBS MID-DAY: Uneventful Start, but Now Falling Back to Important Levels

By: Matthew Graham •

Monday continues to look like a mere shadow of the trading days at the end of last week.  For example, Fannie 3.5 MBS have been in a range between 102-22 and 102-27.  By contrast, the highs and lows on Thursday and Friday were 102-30 and 102-17 respectively.

Overnight and early morning momentum was relatively positive within that narrow range.  As evidence of the lack of meaningful data/news, the most widely-cited overnight story involves a poll in Scotland showing a majority favors independence from Britain.  While the effects of that news were evidence in British bond markets, European and US markets were barely affected, if at all.

Positivity stayed intact long enough for the Fed to begin their scheduled buying operation in Treasuries at 10:15am.  The bias has been negative from there on out.  MBS lost enough to suggest some small amount of negative reprice risk, and 10yr yields are right back to their important technical zone at 2.46. 

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
98-30 : +0-01
FNMA 3.5
102-21 : +0-03
FNMA 4.0
105-29 : +0-03
Treasuries
2 YR
0.5160 : +0.0040
10 YR
2.4600 : +0.0000
30 YR
3.2270 : -0.0100
Pricing as of 9/8/14 12:42PMEST
Morning Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
11:57AM  :  ALERT ISSUED: Negative Reprice Risk Debuts as MBS hit Lows
9:07AM  :  Bond Markets Hold Important Territory Overnight; Slightly Stronger This Morning
Live Chat Featured Comments
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Kent Mikkola, NMLS 353976  :  "Another option would be usimg an asset dissapation lender, but you will.have far less income to use for qualifying"
Kent Mikkola, NMLS 353976  :  "normally not BC... have them set up a distribution and some lenders will need 1-3 months of receipt... they can change the distributions at any time"
Hugh W. Page  :  "Brian, I believe a periodic distribution needs to be established and proof of receipt of that distribution for a set period of time (like 3 mos but not totally sure). "
Brian Chernega  :  "if a borrower takes distributions from his IRA, NOT set amounts, but has enough to last another 10yrs on average, cant you sue as income?"