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Negative Reprice Risk Rising as MBS hit new Lows
Posted to: Micro News
Tuesday, December 31, 2013 11:27 AM
Fannie 4.0s are now down 7 ticks on the day to 102-31. Depending on the time of morning that a lender released their first rate sheets, this puts some of them past the 4 tick (.125) mark, and creates some negative reprice risk. 10yr yields are up 4bps to 3.017 and moments ago, hit 2yr+ highs at 3.021.
There is no clearly defined motivation for the weakness apart from end-of-year tradeflows and position squaring. Volume is still quite low overall and despite the the "highest yields in more than 2 years," today's movement is really quite unimportant in the big picture.
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