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Late Stock Slide Helps Bonds, Reprices Unlikely But Possible
Posted to: Micro News
Tuesday, December 11, 2012 3:30 PM
MBS just inched into their highs of the day with Fannie 3.0s down only 1 tick at 104-31+. There's little to lean on by way of market movers apart from Senator Reid saying it will be hard to reach a deal on the Fiscal Cliff before Christmas.
If that's our market mover, markets paid it almost no mind for at least 5 minutes after it hit the wires (that's uncommon). Whatever the case, stocks began to slide shortly thereafter, and are currently within a few S&P points of opening levels--8 points from mid-day highs.
10yr Treasury yields stepped back from their ledge in the mid 1.65's and moved to mid 1.64's. Riveting...
Bottom line, there's a small, lingering possibility that we'd see a positive reprice or two, due more to the microscopically positive stability rather than empirical improvements in prices. Qualitative > Quantitative. It has been known to happen, but we wouldn't plan on it. Tomorrow's FOMC announcement continues to keep trading ranges compressed.
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