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Treasuries Break Support; MBS More Affected; Edge of Reprice Risk
Posted to: Micro News
Monday, February 24, 2014 12:44 PM
After bumping into a ceiling at 2.784 on numerous occasions this morning, 10yr yields just broke higher and shot up a quick 1bp. MBS had been doing a decent job of trading a more sideways day vs Treasuries' slightly weaker bent.
The latest move, however, is having more of an affect on MBS. Fannie 3.5s are now down 4 ticks from morning rate sheet times, right on the doorstep of negative reprice risk. If Treasuries continue moving higher and MBS hold these losses or lose a few more ticks, negative reprices are possible.
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