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Mortgage News Daily

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MBS RECAP: Bond Markets Pull Back, NFP Only Part Of The Story
Posted to: MBS Commentary
Friday, December 07, 2012 4:05 PM

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MBS Live: MBS Afternoon Market Summary
We've mentioned this a few times today, but it bears repeating.  The expectations for today's jobs number were--by the admission of the economists and analysts surveyed to arrive at the consensus--adjusted lower to account for Hurricane Sandy.  Wednesday's ADP report even chalked up 86,000 payrolls lost due to the storm.  The anticipated impact varied, but it was unquestionably there.  The point is that as soon as BLS said that Sandy had no impact on this report, markets couldn't really know if they were responding to "better-than-expected" data or not, but in all likelihood, the expectation would have been close to, if not higher than the 146k print.  Combine that with the 33k negative revision to last month and it was a fairly negative report, or at least lacking in terms of a suggestion of growth.  For a good example of a market that was trading these realities, one need look no further than equities which retraced back INSIDE Thursday's range by 11am.  Bond markets didn't even make it half-way back to Thursday's range, though MBS outperformed.  The conclusion is that bond markets have other "stuff" on their minds, including next week's FOMC announcement and round of Treasury auctions, not to mention recent technical resistance near recent price highs. 
MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
FNMA 3.0
105-01 : -0-07
FNMA 3.5
106-23 : -0-03
FNMA 4.0
107-06 : +0-01
FNMA 4.5
107-28 : +0-01
GNMA 3.0
106-14 : -0-08
GNMA 3.5
108-20 : -0-03
GNMA 4.0
109-15 : -0-01
GNMA 4.5
109-10 : +0-02
FHLMC 3.0
104-23 : -0-07
FHLMC 3.5
106-10 : -0-01
FHLMC 4.0
106-21 : +0-02
FHLMC 4.5
107-02 : -0-01
Pricing as of 4:05 PM EST
Afternoon Reprice Alerts and Updates
Below is a recap of instant Reprice Alerts and updates issued via email and text alert to MBS Live subscribers this afternoon.

2:41PM  :  ALERT ISSUED: Scattered Reprices As Leakage Continues
Another hour of bumping and bouncing on the next technical ledge lower as MBS have continued their ratcheting movement lower. Same story as before with stocks and Treasuries as well. Volumes are dwindling as the weekend approaches, but we're now into those levels where negative reprice risk is more developed. Fannie 3.0s have been holding the most recent ledge at 104-31 for just under an hour, and any further losses could bring additional lenders on board for a negative reprice in addition to the two we've seen so far.
1:43PM  :  Slow Leak Since Into PM Hours, Reprice Risk Still Limited
Fannie 3.0s are definitely heading the wrong direction, but they're doing so in a rather slow and methodical way. Treasury yields and stock prices are doing their own leaking as well, ratcheting just barely higher at fairly regular intervals. Neither has made it back to 8am-10am levels, but MBS are at their weakest levels since the few minutes following the NFP release.

The gap between current levels and rate sheets this morning is still not even an eighth of a point (1-3 ticks), except for lenders who priced exceptionally late in the morning. Even then, reprice risk is likely very limited at current levels and given the current pace of the selling.

105 to 105-01 has been the latest in a series of "ledges" that have offered technical support. It's been holding for about an hour and looks a bit tired. In rare cases, some lenders view this as grounds for a reprice, but we mention the technical ledge more to point out a line in the sand. If prices break lower (thinking of numbers like 104-30 to 104-31) then we'd be getting into a slightly more risky negative reprice situation.
Live Chat Featured Comments
A recap of the featured comments from the MBS Live Dashboard's Live Chat feature, utilized by hundreds of industry professionals each day.

Bill Laffey  :  "REPRICE: 3:40 PM - Cole Taylor Worse"
Rob Clark  :  "REPRICE: 2:31 PM - Provident Funding Worse"
Nate Miller  :  "REPRICE: 1:45 PM - Interbank Worse"
Chip Harris  :  "Yes, Clayton. 97.75% + UFMIP"
Clayton Sandy  :  "Question, FHA Rate and term, we can still go to 97.75%, correct? "

Read what our user's have to say about MBS Live on LinkedIn.
» Start a two week free trial of MBS Live.



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Mortgage Rates:
  • 30 Yr FRM 4.10%
  • |
  • 15 Yr FRM 3.26%
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  • Jumbo 30 Year Fixed 3.98%
MBS Prices:
Recent Housing Data:
  • Mortgage Apps 5.31%
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  • Refinance Index 2.42%
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  • Purchase Index 8.88%