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Bond Markets Weaken Into Equities Session; Reprice Risk Mostly Contained
Posted to: Micro News
Wednesday, September 04, 2013 10:38 AM
Treasuries and MBS moved into weaker territory at the 9:30am opening bell for stocks. MBS trading has been less than less than liquid, but 4.0s were briefly as low as 102-20 (currently 102-22), down from 102-26 highs.
The bounce back comes after Treasuries put in a supportive bounce at 2.867. Any price action within this range for MBS likely keeps negative reprice risk out of the picture, though that's a safer assumption here at 102-22 than it was at 102-20.
Additionally, the brief swoon and recovery give us a good line in the sand to watch for any potential reprice risk later today. In other words, falling past 102-20 would be a good early indicator of risk if it happens later in the session.
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