MBSonMND: MBS RECAP
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FNMA 3.5
101-14 : -0-10
FNMA 4.0
104-06 : -0-11
FNMA 4.5
106-04 : -0-09
FNMA 5.0
108-01 : -0-10
GNMA 3.5
102-24 : -0-08
GNMA 4.0
106-02 : -0-10
GNMA 4.5
108-11 : -0-08
GNMA 5.0
110-04 : -0-10
FHLMC 3.5
101-09 : -0-09
FHLMC 4.0
104-02 : -0-10
FHLMC 4.5
105-30 : -0-09
FHLMC 5.0
107-25 : -0-11
Pricing as of 4:03 PM EST
Afternoon Market Updates
A recap of MBS Market Updates provided by MND Analysts and streamed live to the MBSonMND Dashboard .
3:36PM  :  New MBS Commentary Post
3:14PM  :  FHA: New Loan Limits Take Effect October 1st
On October 1, 2011, the Federal Housing Administration (FHA) will implement new single-family loan limits as specified by the Housing and Economic Recovery Act of 2008 (HERA). As a result, FHA will reduce loan limits in the highest cost metropolitan areas of the country while limits would remain unchanged in most other parts of the nation.
3:05PM  :  Global Markets Recap: Concerns Over Growth, Euro-Zone
(Reuters) - Gold set a fresh record high and equity markets slid anew on Friday as lingering fears about Europe's debt crisis and a possible slide by major economies into recession kept the bid for safe-haven securities alive. Commodity prices rebounded after the U.S. dollar plunged to a record low against the yen on speculation Japanese authorities will not intervene often to halt the yen's surge. Gold prices early in the session rallied almost 3 percent as investors sought refuge from Thursday's hefty losses in stocks, when the yield on 10-year U.S. government bonds slipped below 2 percent for the first time in 60 years. Spot gold XAU= jumped to a record $1,877 an ounce and was last trading near $1,846.50, still on track for its biggest one-month rise in nearly 12 years in August. U.S. stocks see-sawed and then turned lower while European stocks closed down on recession fears and concerns about regional bank funding. Friday was "a continuation of the same two themes: concern over the prospects for world growth and concerns over the stability of the euro zone," said Alan Brown, chief investment officer at Schroders, which manages $329 billon in assets, in a note to investors.
2:15PM  :  Stocks Languish Near Lows, TSYs/MBS Grinding Sideways Into Close
Not to jinx it, but it looks like the day is over. No major leap of analytical faith in making such claims at 2pm on a Friday, but still. The one thing that could be going on right now is a potential retest of the day's lows in S&P. Bond market activity seems to be picking up slightly as a result, but even then, will it be enough to crack the 2.07 floor today for 10yr yields? Unlikely to see such a thing occur with enough volume to suggest significance. Fannie 4.0's continue to operate in the same sideways range that has governed them all day. 104-06 to 104-16, but recently, that's been even more narrow at 104-07 to 104-12. It's all a bit boring and anti-climactic, but at these price levels, that's fine by us. Market could use a bit of that right now.
2:15PM  :  MBA Increases Origination Forecast in 2011, Predicts Greater Drop in Origination Volume in 2012
The Mortgage Bankers Association's (MBA) Economic and Mortgage Finance Forecasts released today project $1.1 trillion in residential mortgage origination volume in 2011, roughly $100 billion more than earlier forecasts, as low mortgage rates have brought in higher than expected refinance volume, while purchase volume has been less than anticipated. However, despite lower forecasted mortgage rates, weaker projected economic growth in 2012 led to a reduction in MBA's origination forecast for that year to $931 billion, which would be the lowest volume originated since 1997. Jay Brinkmann, MBA's Senior Vice President of Research and Education and Chief Economist said, "We have lived through a series of unprecedented events over the past month: the debt ceiling crisis, S&P's downgrade of US Treasury debt, the ongoing sovereign debt crisis in Europe, a commitment by the Fed to keep rates near zero for the next two years and stock market volatility that has reached levels not seen since the fall of 2008." "While there is substantial uncertainty about how these events will impact consumer and business behavior, we do not believe that the economy is facing the same types of risks as in 2008. Were the US economy to enter a recession, it would likely be the result of an external shock, and would be shallow and relatively brief. On the other hand, given that both fiscal and monetary policymakers' options are limited at this point, it would be difficult for policy changes to soften any blow."
1:48PM  :  New Mortgage Rate Watch Post
1:01PM  :  Merkel Repeats Criticism of Euro Zone Bond Idea
(Reuters) - German Chancellor Angela Merkel on Friday repeated her criticism of proposals for euro zone nations to issue bonds jointly as a way of resolving the region's debt crisis. "That would certainly be a slippery slope and we'd all end up in a best-case scenario on an average European level, but probably we'd all be worse off," Merkel said. "And we don't want that." Speaking at a rally of her conservative Christian Democrats in the western town of Hameln, Merkel added: "If the debts were all in a single pot, I'd never be able to figure out where they all came from, let alone how could I improve my situation. "And euro bonds would not allow any rights at all to intervene to force discipline on others." (Reporting by Petra Wischgoll; Writing by Erik Kirschbaum; Editing by Andrew Torchia)
11:30AM  :  ALERT: Sharpest Move of the Day for Treasuries. MBS Improve Slightly
A recent comment in the MBSonMND Dashboard puts it perfectly: "Stock Lever Engage." Stocks just say their sharpest downtick of the the day, as did 10yr yields. MBS moved up slightly as well, but not quite at the same pace as stocks and Treasuries owing to the fact that MBS had already been tighter on the morning. Although 10yr notes began the day over 2.10 and broke above one other time, that has generally been the technical battle from yesterday through today. S&P's look to have tested 1150 and failed. Who knows... They could be back. Wherever stocks do go, they're likely to be stalked by 10yr yields. The 1150 level in S&P's and the 2.10 level in 10's are the relative inflection points of the day. If current trends persist, and possibly even if MBS just hold steady, we could be seeing reprices for the better in the not-too-distant future. Fannie 4.0's are only down 1 tick on the day now at 104-16 and 3.5's are down 7 ticks on the day at 101-17.
11:24AM  :  New MBS Commentary Post


Featured Market Discussion
A recap of the featured comments from the Live Discussion on the MBSonMND Dashboard .
Jason Zimmer  :  "Kinecta Bulletin: Asset Utilization allows applicatnts with significant liquid asserts to use those assets as income for qualifying purposes. For Jumbo Loans only"
Matthew Graham  :  "Friday was "a continuation of the same two themes: concern over the prospects for world growth and concerns over the stability of the euro zone," said Alan Brown, chief investment officer at Schroders, which manages $329 billon in assets, in a note to investors."
Adam Quinones  :  "that also explains why rate sheets aren't keeping up with MBS...bc the MBS market is not operating in reality....all assumptions"
Adam Quinones  :  "that is why I tweeted this on Aug10: Bond market in uncharted waters. No basis for bond math/quant valuations/hedge ratios. MBS market flying blind."
Adam Quinones  :  "MG you can chart the CC on Eikon...but I am not a fan of their speeds right now. I backed out 3.5s and it looks like theyre running them near 8-9CPR"
Adam Quinones  :  "in April it was low +70s"
Adam Quinones  :  "2months ago...+96"
Adam Quinones  :  "one month ago I had it at +100bps/10s"
Adam Quinones  :  "I have the Current Coupon MBS (100-00) at 3.268% right now....that is 117bps over the 10yr note. 1yr ago I had it +106bps"
Matthew Graham  :  "can do that Bromi, can also do a line of the spread in yields, (based on reuters prepay and coupon blending assumptions which aren't necessarily the same as our own. still... would be hard to tell the difference on the chart)"
Bromi Krock  :  "MG, I am sure you have done this chart and am hoping you will allow me to be lazing and send it to me. Wanting to see the 10yr over the last month compared to the FNMA 4.0. Trying to figure out just how disconnected we currently are."
Matthew Graham  :  "RTRS- PIMCO'S GROSS-EXPECTATIONS OF POSITIVE OUTCOME FROM U.S. SPECIAL DEFICIT PANEL PROBABLY "POLLYANNISH" "
Matthew Graham  :  "RTRS- PIMCO'S GROSS-FISCALLY CONTRACTIONARY U.S. DEFICIT DEAL WOULD ALMOST GUARANTEE RECESSION "
Matthew Graham  :  "RTRS- PIMCO'S GROSS-THERE ARE STEPS BERNANKE CAN TAKE TO HELP ECONOMY BUT NOT SURE WILL BE TAKEN IN AUGUST "
Matthew Graham  :  "RTRS - PIMCO'S GROSS-FISCAL AND MONETARY AGENTS IN EUROPE ARE "AT EACH OTHER'S THROATS" "
Matthew Graham  :  "RTRS - PIMCO'S GROSS-LOW US TREASURY YIELDS REFLECT HIGH PROBABILITY OF RECESSION "
Matthew Graham  :  "RTRS- PIMCO'S GROSS-INCREASINGLY APPARENT POLICY OPTIONS LIMITED TO HELP ECONOMY -REUTERS INSIDER "
Adam Quinones  :  "for sure...not compared to early last year, but more than we've seen in months"
Matthew Graham  :  "safe to say "moderately healthy" origination volume "
Ethan Brizzi  :  "Provident Funding .125 improveement"
Ken Crute  :  "loan processing is a thankless and undervalued job, they clean up LO messes, deal with clients, fix problems all for a 1/3 of what an average LO makes, while we are on the golf course "
Dean Gorenflo  :  "traders loading up the jitney for the weekend on Long Island"
Matthew Graham  :  "so far, looking like range trade from 2.07 to 2.12. It's after Noon eastern now. Things should die down. Even if that range breaks, unless it's in high-ish volume, it's still not even that consequential. If it break in high-ish volume, we'll cross that analytical bridge when/if we come to it."
Brett Boyke  :  "feel like we are playing chicken and the egg, lenders dont want to move down until they have the volume to justify - at the same time LO's are hesitant to lock and risk rates going down"
Brett Boyke  :  "confused - TSY yields are down 15-16 ticks from Wednesday but no love in MBS"
Alan Craft  :  "Just got a reprice for the worse."