MBS RECAP: 2 Months of NFP Losses Nearly Erased

By: Matthew Graham

While mileage may vary depending on the lender, many are getting close to levels not seen since Thursday Feb 5th, a day before the NFP report that kicked February's selling trend into high gear.  That would go on to receive an exclamation point with March's NFP release as rates hit 2015 highs in its wake.  But ever since then, rates have been descending, and not in a half-hearted way.  11 out of the last 12 days have been steady or stronger.

Today was particularly interesting as both of this morning's economic reports were stronger than expected.  Even though they didn't beat big, if bonds would have been looking for an excuse to bounce off recent floors, they would certainly have had it this morning.  The fact that European bonds continued to weaken only adds to that "excuse" potential. 

Instead, bonds broke forcefully through those floors.  This is a strong technical statement, and exactly the sort of thing we needed, based on the discussion in this morning's "day ahead: Decision Time For Bond Markets After Running Out of Momentum."

The last "yeah but" I can offer would be to say that breaking through resistance floors for one day can sometimes serve as a signal for sellers to step in.  With that in mind, holding onto the technical break through tomorrow would be ideal confirmation. 


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
102-16 : +0-09
FNMA 3.5
105-06 : +0-07
FNMA 4.0
106-31 : +0-05
Treasuries
2 YR
0.5610 : -0.0160
10 YR
1.8680 : -0.0410
30 YR
2.4580 : -0.0510
Pricing as of 3/24/15 4:12PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
9:58AM  :  Little-Changed After CPI; Outperforming Europe Again

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matthew Graham  :  "Tony's techs are sound, assuming the client understands the risk of loss. Same technical levels we've been watching. Vic's thoughts on 1.90 are also right on. Good job all."
Steve Chizmadia  :  "That's my gameplan here as well"
Victor Burek  :  "definitely don't lock now...wait until later in day if you do plan to lock"
Tony Garcia  :  "agreed Victor"
Gus Floropoulos  :  "Just for the record, I am locking loans that are closing within 10-15 days."
Victor Burek  :  "if we cant break 1.90 today...locking is very wise, especially short termers"
Gus Floropoulos  :  "Jamie, locking in at these levels is not a bad idea, especially if your customer is happy. Loans closing inside of 15 days don't have much time to play the float game with."
Tony Garcia  :  "Float- Jamie. until you see 1.95 on 10 yr. (then lock). if we can break 1.9 we could see more improvement"