MBS Bouncing Along Lows; Modest Reprice Risk Remains
Nothing about trading levels has changed since 11am as MBS continue to bounce along at the lowest prices of the day. On a positive note, they've done a good job of not breaking any lower. On a negative note, the losses are right around an eighth of a point for some lenders depending on the time of day they generated rate sheets.
While that suggests most are not at great risk of negative reprices, it also means it can't be ruled out for others (a few already have). On a qualitative note, losses today would break the recent streak of steady-to-lower rates for the past 6 sessions.
Reprice risk would increase if Fannie 4.0s move below 104-14 or if Fannie 3.5s move below 101-06. Technical support at 2.656 in 10yr yields also seems worth glancing at as that's where yields held firm twice this morning (currently 2.643).