MBS Live: MBS Morning Market Summary
Even from afar, today showed promise as having the potential to be "mostly dead" in terms of market moving data, and indeed, market movements themselves.  Thus far, it has not disappointed with as close to ZERO motivation to take things in one direction or another.   The first high in MBS prices was just under yesterday's high; the first low just above yesterday's low...  Result: narrow range.  That said, with the 103-10 technical level underfoot and some recent underperformance, MBS have entered a zone where they could be looking a bit more attractive to some investors.  Combine that with the fact that the bid-side of the market was fairly subdued this morning versus a relatively heavy supply of new origination (aka: "offer side" or "selling pressure") for such a tight day, and we have the ingredients for a supportive afternoon, provided that underlying benchmarks such as 10yr yields also do a decent job of holding their range.  So far they have... So far so good.
MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
FNMA 3.5
103-12 : +0-02
FNMA 4.0
105-14 : +0-01
FNMA 4.5
106-30 : +0-00
FNMA 5.0
108-17 : +0-00
GNMA 3.5
104-28 : +0-01
GNMA 4.0
107-29 : +0-01
GNMA 4.5
109-12 : +0-01
GNMA 5.0
110-25 : +0-01
FHLMC 3.5
103-05 : +0-02
FHLMC 4.0
105-03 : +0-01
FHLMC 4.5
106-15 : -0-01
FHLMC 5.0
108-01 : -0-01
Pricing as of 11:04 AM EST
Morning Reprice Alerts and Updates
Below is a recap of instant Reprice Alerts and updates issued via email and text alert to MBS Live subscribers this morning.

9:55AM  :  ALERT ISSUED: Wednesday's Trade Living Up To Uneventful Expectations
Miracle Max would classify bond markets today as “mostly dead.” Rather than a well-staffed battle between buyers and sellers, we’re instead seeing things drift apathetically sideways, slightly influenced here and there by whatever motivation can be found.

If we had to pick one overriding tidbit of support (read: keeping 10yr yields under 2%), it would probably be tomorrow's Spanish debt auction. That's a sign of the times when Jobless Claims, Philly Fed Index, and Existing Home sales are all seen as relatively inconsequential compared to a scheduled debt auction in the EU Periphery. But then again, the EU Periphery is the main reason yields are as low as they are in the first place.

If we had to pick a tidbit of resistance (read: keeping yields from breaking much lower than the double-tiered floor at mid 1.97's and 1.95, it would probably be a slightly more diverse answer, but chiefly, would include "the range (hesitant to take things too far in either direction ahead of next week's FOMC), and the absence of meaningful domestic data suggesting that bond markets pay more attention than usual to equities markets.

We can appreciate not only that the previous sentence was incredibly long, but also that this alert/update focuses mainly on Treasuries, yet appears on an MBS-website. Sorry if that causes confusion, but MBS are even more of a victim of the "watching and waiting" vibes out there... Whereas Treasuries have little to go on, and must look elsewhere for guidance, MBS are merely another degree separated from the same phenomenon, with originator-created supply causing slight adjustments in spread to Treasuries.

Thus far, MBS are underperforming slightly... down to 103-10 support so far this morning, 1 tick worse than last night. 10yr yields are just over 1bp better than last night at 1.9823. We doubt MBS will make a meaningful push below 103-10 unless 10's making a meaningful push toward the 2% pivot.
Live Chat Featured Comments
A recap of the featured comments from the MBS Live Dashboard's Live Chat feature, utilized by hundreds of industry professionals each day.

Andy Pada  :  "Wish I they would have given us some notice."
Andy Pada  :  "Fannie Mae just changed their pricing on Refi Plus over 125% LTV. About 80 bps worse on the lower rates"
David Gaffin  :  "Personally, I would like to see the windown of GSEs to take as long as possible, as the most recent few years of loans are performing exceptionally well and therefore are profitable."
Matthew Graham  :  "Very interesting article in the news stream: http://www.bloomberg.com/news/2012-04-18/fannie-mae-fix-said-to-retain-some-u-s-mortgage-role.html"
Matt Hodges  :  "no doubt Timmy chooses his words very carefully"
Matthew Graham  :  "if I learned anything from watching the TBTF movie it's that SecTreas and The Ben sometimes speak to each other. Must be a clue about MBS ongoing inclusion in next week's Announcement"
Matt Hodges  :  "yeah, Timmmay"
Matthew Graham  :  "RTRS- GEITHNER SAYS WOULD BE VERY DAMAGING TO RECOVERY TO TAKE GOVERNMENT OUT OF HOUSING MARKETS AT THIS TIME "
Jeff Anderson  :  "Gm, from Cape Cod. Bouncing off the 103-10 was a good thing though. Feels like a shorter term range forming, right? But I agree with being defensive. As I am all locked up."
Ira Selwin  :  "I use it to give LO's guidance on lock/float sometimes. They ask if they should lock, and I tell them what everyone else is doing"
Ira Selwin  :  "One of the beauties of a community based service like this"
Adam Quinones  :  "Easy way to track the herd's sentiment"
Andy Pada  :  "there you have it."
Adam Quinones  :  "i have asked the bigger lock desks if they pay attention to the advice of services like MBS Live. Got a definitive YES"
Adam Quinones  :  "actually....it does"
Andy Pada  :  "Ha, MG. Maybe your analysis on 103-10 caused a lock-in deluge...Mr. Market Mover"
Matthew Graham  :  "so far so good AP"
Andy Pada  :  "So the pivot was 103-10?"
john murphy  :  "extra coverage meaning they think rates r going to rise i.e. over-delivery scenarios/lack of fallout fr correspondent and/or retail? "
Adam Quinones  :  "...especially when LO's are actively locking for borrowers"
Adam Quinones  :  "they stay optimal but also tend to put on extra coverage at major pivots"
Adam Quinones  :  "biggest banks represent ~70% of daily hedges"
john murphy  :  "AQ/MG..others? So the big banks dont hedge fwd commits in bulk? I would think their forecasted pipes would be locked down on a consistent basis? are they issuing billions in locks to correspondents naked? not sure I understand. I hedge on a flow basis w 80%+ deliveries"
Adam Quinones  :  "it means they were putting hedges on their pipeline...aka locking in profits."
B-C  :  "loans ready to close or rates getting worse?"
B-C  :  "what does it mean AQ that they were locking?"
Adam Quinones  :  "anyway...the major banks were locking loans yesterday. That should tell you all something. "
Adam Quinones  :  "the mortgage market was locking in size!"
Adam Quinones  :  "woooweeeeeee....$3bn+in originator hedging yesterday!"

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