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Negative Reprices Incrementally More Likely as MBS Push to New Lows
Posted to: Micro News
Wednesday, March 19, 2014 1:28 PM
Momentum continues to be negative for bond markets leading up to the FOMC announcement. There is no overt cause and effect with these moves--just tradeflows snowballing in fairly low volume.
Fannie 4.0s are now down 6 ticks on the day, with at least 5 of those arriving after many lenders' initial rate sheets. That creates moderate negative reprice risk across the board. It would take more weakness before reprices become widespread, but at current levels, we'll likely see a few.
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