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Negative Reprice Risk Rising For Ealy Lenders Following Euro Headlines
Posted to: Micro News
Friday, March 22, 2013 10:14 AM
Coming into the day, we knew that Italian political headlines could be a risk as Italy's president said he would make an announcement. Just after headlines hit that President Napolitano is calling a meeting with Bersani (the guy he'd probably pick to give the "mandate to form a government" to), bond markets began selling off quickly and Italian credit spreads rocketed tighter.
Moments later, wires hit saying Cypriot lawmakers say a deal deal that adheres to the EU framework may be possible "within hours." Further rocketing ensured and 10yr yields are up 3bps in 12 minutes. MBS are holding their ground MUCH better but are well off their 102-29 highs at 102-24 at the moment. Lenders who priced early are rapidly approaching "reprice risk" territory.
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