MBS RECAP: Bad Day for Bonds; Weakness Tomorrow Would Threaten Critical Support

By: Matthew Graham •

Bond markets began the day by putting in a repeat performance of yesterday's overnight and early morning hours. Both days say a 3-4 bp drift higher overnight and another 3-4bp spike in yields ahead of 9am.

Today's version didn't have as pleasant of an ending though. yields continued to drift sideways to slightly higher. Fannie 3.0s remained stuck under 103-08, right in line with yesterday's weakest levels. When prices are repeatedly hitting their heads on a ceiling that was yesterday's floor, it's never good.

MBS buyers went on a more serious strike just after 2:30, resulting in a quick eighth point drop to 102-30. The move had roots in an oil price spike that pushed Treasury yields and stock prices higher starting around 1pm.

From a technical perspective, yesterday now stands as a failed test of a break below 1.70 in 10yr yields. Similar weakness tomorrow would threaten critical support at 1.84.

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
102-28 : -0-18
FNMA 3.5
105-11 : -0-11
FNMA 4.0
106-32 : -0-05
Treasuries
2 YR
0.5160 : +0.0480
10 YR
1.7980 : +0.1237
30 YR
2.3870 : +0.1300
Pricing as of 2/3/15 5:11PMEST
Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
4:22PM  :  ALERT ISSUED: Yet More Reprice Risk!
2:01PM  :  ALERT ISSUED: Negative Reprice Risk Becoming Widespread
1:24PM  :  ALERT ISSUED: Oil Greases Skids for Bond Market Slide; Some Reprice Risk
9:25AM  :  This Broken Record Still Plays Music--In this Case, It's Greek
MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Jeff Anderson  :  "Stock lever today not our friend."
Brent Borcherding  :  "These odd times have lasted 6+ years."
Victor Burek  :  "what odd times, higher oil is good"
Matthew Graham  :  "
MBS Live Alert Issued
Oil Greases Skids for Bond Market Slide; Some Reprice Risk"
Christopher Stevens  :  "Closing above 1.75 would be unpleasant, breaking 1.84 would be ugly."
Oliver Orlicki  :  "lock um up"
Oliver Orlicki  :  "getting ugly"