As seen in the recap of live alerts below, this morning's gains for MBS and Treasuries arrive on the heels of data that normally can't be counted on for the amount of market movement it seems to have created. The 10am New Home Sales data looks like it mattered to domestic markets, but there's no question that other factors are in play, including rising oil prices and what had been an ongoing rally in European bond markets. 10yr yields look to have bottomed around 2.21 and Fannie 3.5 MBS topped out at 102-19. At this point we're just hoping for volatility to stay at bay into the afternoon and hang on to the moderate level of gains that began the day.

After Greece announced that the remaining "international law" bondholders would get an extension for the private sector bond swap, through April 4th, risk markets took a positive turn with stocks surging and bond markets weakening.  But Treasuries weren't interested in chasing stocks too much higher and held onto a supportive ceiling at a pivot point in the mid 2.24's.  Fannie 3.5's bounced at 102-10 and currently sit at 102-12.  The rather precipitous drop from earlier highs prompted some lenders to reprice for the worse, but risks are abating now.

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FNMA 3.5
102-12 : +0-05
FNMA 4.0
104-19 : +0-03
FNMA 4.5
106-05 : +0-01
FNMA 5.0
107-30 : +0-01
GNMA 3.5
103-25 : +0-04
GNMA 4.0
107-00 : +0-03
GNMA 4.5
108-23 : -0-01
GNMA 5.0
110-16 : +0-00
102-06 : +0-06
104-11 : +0-03
105-29 : +0-01
107-20 : +0-00
Pricing as of 1:23 PM EST
Morning Market Updates
A recap of MBS Market Updates provided by MND Analysts and streamed live to the MBS Live Dashboard.

Make sure you're signed up for Reprice Alerts to be notified by email or text the instant these are issued.  You can manage all MBS Live email and text notifications thru the 'My Alerts' menu option at the bottom of the dashboard or by clicking here.
11:39AM  :  ALERT: Rally Quickly Moderates After Greece News.  Reprice Risk Shifting
MBS have descended back to morning levels and 10yr yields are back up into the 2.24's after a heady little rally at 10am. News that Greece will extend the deadline for the remaining "international law" bondholders until April 4th is having a positive effect on risk markets, bringing stocks up and weakening bond markets. 

We weren't especially convinced we'd see any positive reprices earlier and indeed got only one. Similarly, we're not now expecting a flood of negative reprices, but we are sensitive the a 6/32nds swing in prices for any lenders who priced between 10:15 and 10:45am. 

In terms of gauging the broader shifts, 10yr yields are at an important pivot point here in the 2.24's. This could turn out to be an oversimplification, but it looks like if 10's can hold a pivot at 2.244, then MBS will be content to hold their ground as well, minimizing the already relatively small reprice risk. Fannie 3.5's are still 6 ticks improved on the day at 102-12. 

to recap: we'd keep an eye on 2.244 in 10's and 102-11 in Fannie 3.5's as pivot points. If MBS are moving lower through 102-11, reprice risk is increasing. 
10:15AM  :  ALERT: Straw Breaking The Camel's Back... Big Rally After Sales Data
Classic example of a relatively inconsequential piece of data giving the impression that it's the cause of a big rally. Whatever the case, bond markets are on the offensive after New Home Sales--a report that simply cannot be credited with inciting moves of this size in and of itself.

Technical levels were on the edge. This data gave markets a gentle nudge, was joined by spiking oil prices at the same time, and some snowballing has ensued, both in terms of selling stocks and buying Treasuries. S&P's are off 8 point in 10 minutes... pretty significant and 10yr yields are down to 2.2156. Lagging the rally are our beloved MBS, up only 10 ticks at 102-17, and wanting to see some more stability in benchmarks before buying into this relatively significant notch lower in the trading range.

Even so, some of the characteristically early-to-act lenders would soon be considering positive reprices if current levels hold or are improved upon.
10:07AM  :  ECON: New Home Sales Miss Expectations
* New Home Sales 313k annual rate, vs 325k consensus
*down 1.6 pct vs jan down 5.4 pct

Sales of new single-family houses in February 2012 were at a seasonally adjusted annual rate of 313,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 1.6 percent (±23.9%)* below the revised January rate of 318,000, but is 11.4 percent (±17.8%)* above the February 2011 estimate of 281,000.

The median sales price of new houses sold in February 2012 was $233,700; the average sales price was $267,700. The seasonally adjusted estimate of new houses for sale at the end of February was 150,000. This represents a supply of 5.8 months at the current sales rate.
9:17AM  :  ALERT: 10yr Yields Doing A Convincing Job of Breaking Lower
Like a scorned lover, it's hard to trust that the 10yr is genuinely committed... So far, an important pivot point below 2.26 is being aggressively tested this morning, and we're now seeing a big break lower in the biggest volume of the morning. Yields are currently down to 2.2335 after staying in a bit of a sideways holding pattern from 2.26 to 2.245.

We want to believe that 10's can hold under 2.26 for the rest of the day, but we'll likely continue to be skeptical until this new potential reality has more time to confirm. In a way, entertaining how much of a rally bond markets might have is rather inconsequential for the lock/float outlook as we don't have to worry about negative reprices until/unless things turn around and head the other way after rate sheets are out.

MBS, for their part, are also having a bit of a problem trusting the rally in benchmarks, only up to 102-13 at the moment whereas yesterday's trading range relative to 10yr trading range would have Fannie 3.5's well over 102-16. In other words, we've seen a bit of widening, both yesterday and this morning.
Featured Market Discussion
A recap of the featured comments from the Live Chat on the MBS Live Dashboard.
Ira Selwin  :  "REPRICE: 11:00 AM - Wells Fargo Better"
Ira Selwin  :  "Yeh Eric, I haven't seen the same so not sure. Wells from Tues - > today is better at 4%"
Eric Leithliter  :  "all of my top lenders have been getting worse pricing at 3.75, 4.00, and 4.25. "
SMTM  :  "EL Depends on your investors"
Eric Leithliter  :  "anybody know why FHA Jumbo pricing has been getting worse over the last 3 days, even though MBS's have been improving?"
Andrew Horowitz  :  "thankfully so we can all sit around this campfire and discuss MBS"
Victor Burek  :  "he did invent the internet"
Andrew Horowitz  :  "maybe Al Gore was right..hmm"
Andrew Horowitz  :  "GM folks, why not IRA it is going to 80 today in philly"
Victor Burek  :  ".125 worse at 3.8 and below, .125 better 4.0 and above"
Berton McLain  :  "Conservative pricing all around"
Victor Burek  :  "just got plaza's rates..and they are worse than yesterday!"
Matthew Graham  :  "good surge after 10am, was slow before that though, leaving the overall totals on the low side of the week"
Adam Quinones  :  "another slow one TQ"
Adam Quinones  :  "Friday started yesterday"
Thomas Quann  :  "nice way to start Friday, just got in... howe the volume btw?"
Dirk Postupack  :  "Gaius.....I got a lot of fence sitters to get in the game and helped out greatly....seems that people will rect to locking cause dthey missed the bottom and they dont want to be out in the cold...."
Matt Hodges  :  "there's a ton of untapped refi's Gaius"
Victor Burek  :  "definitely Gaius"
Gaius Rossini  :  "so you guys think if we rally back, business will pick right back up?"
Gaius Rossini  :  "i guess, but there is money to be earned - and it can't last forever"
Matt Hodges  :  "geoff makes a good point - many of us are working 7 days, and that's no fun"
Geoff Allison  :  "It's given me a chance to breathe, chance for lenders to decrease turntimes. I feel we will be back to 103 and higher, not sure of timeframe but filling my pipeline until then."
Matt Hodges  :  "purchases not affected at all"
Victor Burek  :  "mainly on clients who already have a rate in teh upper 4's"
Victor Burek  :  "def slowed my refi"
Gaius Rossini  :  "and refinancings from which coupons have been most affected."
Gaius Rossini  :  "hey - question for y'all. how much has the sell off affected refi business?"
Matthew Graham  :  ""
Matthew Graham  :  "should be on the chart in the Day Ahead"
Sung Kim  :  "1mm or so for new homes?"
Sung Kim  :  ""boom time""
Sung Kim  :  "what was the run rate during the ""
Matt Hodges  :  "I think Liesman on CNBC this am said roughly 70-80K of the new jobs in last month's report were weather related - continuing the theme that purchases moved up a month, but didn't get stronger"
Matthew Graham  :  "RTRS - US FEB SINGLE-FAMILY HOME SALES -1.6 PCT VS JAN -5.4 PCT (PREV -0.9 PCT) "
Matthew Graham  :  "RTRS- US FEB SINGLE-FAMILY HOME SALES 313,000 UNIT ANN. RATE (CONS 325,000) VS JAN 318,000 (PREV 321,000) "