MBS RECAP: Possibly a Record Day For Positive Reprices

By: Matthew Graham

If today wasn't a record in terms of positive reprice reports from MBS Live users, it was right up there.  44 have come through as yet, and it's not unheard of for reprices to hit even later.  Their combined affect has been strong, but not epic--just barely enough to make today the biggest-gaining day in February.  Admittedly, that doesn't take much doing on such an awful month, but no one's complaining.

As for the motivation, today was all about the Fed, or rather, all about Fed Chair Yellen.  In short, US bond markets had broken away from European bond markets at the beginning of February, with an especially strong move after the freakishly good NFP numbers.  This kicked off snowball momentum and was further fueled by fears that European bond markets had bottomed.  Things have been especially tense ever since the Greece deal began to come into view on the 17th.

A day later, the FOMC Minutes helped domestic bonds improve versus Europe, but domestic markets remained skeptical considering NFP had occurred after the Fed minutes.  They wanted to see if Yellen would have a similar message to the somewhat dovish Minutes.  She did.  Or more appropriately, she didn't drop any bombs.  The fact that markets were worried about bombs was evident in the timing of the sharpest rally move today.  It occurred right as the testimony wrapped up, as if to say "well, if that's all we're going to hear from Janet today, it's safe to rally."


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
101-27 : +0-14
FNMA 3.5
104-24 : +0-11
FNMA 4.0
106-27 : +0-06
Treasuries
2 YR
0.5530 : -0.0530
10 YR
1.9720 : -0.0890
30 YR
2.5840 : -0.0740
Pricing as of 2/24/15 5:29PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
12:26PM  :  Bonds Challenging Technical Resistance, Rallying Now
10:17AM  :  Back in Black (sort of)
10:03AM  :  ALERT ISSUED: Negative Reprice Risk Rapidly Increases as Yellen Speech Released
9:35AM  :  Bond Markets Under Modest Pressure as Greek Deal Passes Eurogroup Hurdle

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "DS, it's obviously easier to be more hopeful after today's move. I'd be more keen to start taking overnight risks after another day closing below 2.04"
Dan Stelzer  :  "What do people think, lock today or wait until tomorrow?"
Steve Chizmadia  :  "spent 4-5 trading days right around this level on the side of lower yields before they convincingly broke higher and through numerous technical levels in a quick move. Hopefully a break lower through some technical levels below 2.0 is not 4 full trading days away"
Sung Kim  :  "http://mndne.ws/1Bms7Ph"