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FNMA 3.5
103-11 : -0-02
FNMA 4.0
105-06 : -0-03
FNMA 4.5
106-17 : -0-03
FNMA 5.0
107-31 : -0-01
GNMA 3.5
104-26 : -0-03
GNMA 4.0
107-22 : -0-02
GNMA 4.5
109-02 : -0-03
GNMA 5.0
110-31 : +0-04
103-02 : -0-02
104-25 : -0-03
106-03 : -0-02
107-20 : +0-00
Pricing as of 4:00 PM EST
Afternoon Market Updates
A recap of MBS Market Updates provided by MND Analysts and streamed live to the MBS Live Dashboard.
3:16PM  :  ALERT: Bearish Bias Dries Up After Hours, Still Sideways
Just a quick update to moderate the negative reprice report from the previous alert. MBS stayed within the day's range and bounced higher following the 3pm close. 10's and MBS have improved into the "going out" hours (from 3-5pm), with Fannie 3.5's actually prodding the top of the day's range. Is it enough for positive reprices now? VERY small outside chance. Would be more possible were it not a Friday with volatile data waiting on the other end of a 3-day weekend. More important is that we're not at the same risk of negative reprices as we were previously.
1:36PM  :  ALERT: Negative Reprice Reported. MBS Still Drifting Sideways
MBS prices retraced to this morning's low range, hitting 103-06 before bouncing higher to 103-08 currently. Everything continues to operate in sideways ranges for both MBS and Treasuries, but we have seen one reprice for the worse as MBS hit their lows. We wouldn't expect most lenders to reprice at current levels, but it's a possibility for the more aggressive, quicker-to-act crowd, with the potential participants in negative reprices increasing if Fannie 3.5's dip below 103-06.
12:43PM  :  ALERT: Headline-Free, Data-Free, Bond Markets Sideways to Better in Low Volume
At the risk of jinxing the calm, slightly positive trading in bond markets, it's another classic case of a Friday Afternoon fade-to-black. 10's and MBS put in their weakest levels of the domestic session right at the open and have trended very gently in a more positive direction ever since. We'd emphasize the "gentle" bit, as the trend is arguably more sideways than positive.

It's as if bond markets--cursed by fate to weaken defensively ahead of the 3-day weekend and next week's events--go their day's work done early, and have simply punched out. Indeed, many shouts of "2.04" have been heard since bouncing higher from 1.90's yesterday. With that having been accomplished this morning, 10yr yields seem content to just sort of drift into the weekend, barring any headline surprises between now and the close. Yes, levels are improved from this morning--2.014 at the moment for 10's and 103-11 for MBS up from 103-04--but both sides of the market seem like they're being careful not to cross back over their respective pivot points before the close.

For MBS, that pivot is 103-10+, and for 10's, 2.01. As long as we continue to operate between those pivots and the morning's weaker levels, nothing is really going on except low volume ebbing and flowing whilst waiting for more informative events in the week ahead. As always, low volume can distort price/yield movements, so we'd asset that the jury is in on the aforementioned trading levels unless we note a significant increase in volume between now and the close.
Featured Market Discussion
A recap of the featured comments from the Live Discussion on the MBS Live Dashboard.
Chris Kopec  :  "I think it's prudent - at least for me - to protect my pipeline.....so, I'm acting as if the next 2 week period will be an utter rout for Treasuries....... just as a figured Philly Fed + UE on Thursday would damage pricing, I'm worried about Euro-Optimism + another good UE next Thursday....and then, we enter the NFP Tractor Beam until the following week, which gives us some sort of Looney Tune ADP number and then 2nd big NFP beat. Yes, I know that total Doom & Gloom, but it is entirely possibl"
David Gaffin  :  "Left for a cruise on 1/19, 3.5 was right around 103, while I was gone jumped to 103-22. I can live with this range for a while longer yet. LIKE through 2020! (ok not quite that long...we will need a healthy economy at some point sooner rather than later."
Ethan Brizzi  :  "as I have no control over the future, I tell my clients that its a great day to lock every day =)"
Michael Gillani  :  "I locked everything closing in less than 30 earlier this week before the dip and I'm floating everything that is 30+ days out to closing. "
Matthew Graham  :  "here's my 2 cents: like Topfer says, LO's and Traders that have bought too far in to Greek headlines over the past few weeks have generally gotten burned. The same is true for any EU optimism since November. As Vic will tell you, if you have a 15 day window, you'd be hard pressed to find a time where you WOULDN'T get back any losses. If you're "playing the range until the range plays you," you keep the foot on the gas until you confirm a break above 2.13. In the shorter run, a break of 2.04 "
Andrew Horowitz  :  "Greece is not solved, Europe is not solved, they are making progress andthat is what you should all be paying attention to"
John Toepfer  :  "Floating....everytime I knee jerked in the past several months I have regretted it. "
Jude Bridwell  :  "I would be more frustrated if I locked today and then got it back next week."
Brent Borcherding  :  "Agreed to some extent, JR, but I believe that time to be will into the future, and there will have to be much less uncertainty in Europe than there is today."
Andrew Horowitz  :  "we are still very much in our range for the 10 year"
Andrew Horowitz  :  "as long as the fed is intent on keeping interest rates low i do not see them going much higher"
Jude Bridwell  :  "I try and stay away from the casinos. I know not a trend, just going to put the ball in his court"
Andrew Horowitz  :  "2 days does not make a trend"
Jude Bridwell  :  "Adam, I'm in the same situation. Got a Dr. who lacks motivation finally called me back from earlier this week on a 470k jumbo. Trying to debate whether to tell him to float or lock. Last two day trend making me nervous"
Alan Craft  :  "All within 30 days locked for me"
Adam Dahill  :  "Anyone floating through the weekend? I lost a few bps this week and I'm contemplating taking my lumps and locking making 101 or trying to get back to 101.5 "
Michael Tadros  :  "REPRICE: 1:28 PM - Interbank Worse"
Bill Laffey  :  "if i recall, they will now allow it w/harp 2.0 in march"
Bryce Schetselaar  :  "does freddie still not allow occupancy changes on open access? I know it used to be like that but then maybe with HARP 2.0?"
B-C  :  "The maximum insurable mortgage for streamline refinances without an appraisal cannot exceed the outstanding principal balance  minus the applicable refund of the UFMIP,  plus the new UFMIP that will be charged on the refinance. Note: The outstanding principal balance  may include interest charged by the servicing lender when the payoff is not received on the first day of the month, but  may not include delinquent interest, late charges or escrow shortages."
Matthew Graham  :  "post a link if you can, since it sounds like there's not a consensus"
B-C  :  "Yes i will find it"
Victor Burek  :  "anyone have the ml letter stating that?"
B-C  :  "plus new UFMIP"
B-C  :  "minus refund"
B-C  :  "principal balance plus 30 days of interest"
Victor Burek  :  "thats what i thought"
Geoff Allison  :  "payoff"
Victor Burek  :  "uw is saying nothing can be added to princple balance i thought nothing can be added to payoff"
BERBATOV  :  "payoff"
Victor Burek  :  "on a fha streamline without appraisal, nothing can be rolled into the new loan but the new upfront...but do they use the principle balance or the payoff?"