MBS Live: MBS Morning Market Summary
As the trading day progresses, things are shaping up to be increasingly uneventful even though MBS are down 6/32nds. Reason being: everything has been well contained, and what little weakness we've seen has occurred in a rather orderly fashion and without major volume spikes. Bond markets are staying reasonably connected to stocks, given the lack of market-moving data and European headlines. In short, today looks like the "wind down" that we thought yesterday might have been. We're not completely out of the woods as far as potential volatility is concerned. But as far as coasting into the weekend with minimal losses, it's "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.
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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.
11:01AM :
ALERT ISSUED:
MBS Bounce at Session Lows, Looking For Support
The stock lever continues to provide some loose guidance for bond markets with a recent run to the highs of the day in S&P's translated to a Treasury/MBS test of the weakest levels of the day. Fannie 3.5's briefly hit 104-16, probably not enough of a slide for much reprice concern, but reprice risks could increase if prices fell back below. We'd also keep an eye on 1.7414 in 10yr yields, a "double top" so far today. This most recent bounce looks like it will stabilize if stocks stay away from retesting their highs, but importantly, it's not yet clear that they'll stay away. Vigilance is a good idea right now. To reiterate, if these technical lines in the sand break down (1.714 in 10's and 104-16 in Fannnie 3.5's), reprice risk is increasing.
10:11AM :
ALERT ISSUED:
Bond Markets Slightly Weaker, but Holding Ground, No Data Ahead
The overnight session was fairly uneventful and mildly negative for bond markets. Things drifted mostly sideways in the Asian session despite a scary, but brief sell-off in equities. Bond markets weakened into the European leg after the Euro bounced off new lows (1.2647). There's also word of a big asset allocation trade in the UK, helping stocks, hurting bonds.
Interestingly enough, Treasuries drew their own line in the sand just barely over 1.74 and have bounced there 4 times since 4:50am New York time. If MBS have an analogous level it's probably 104-16 in Fannie 3.5's--the site of their only instance of ground-holding so far this morning.
With no economic data on the calendar, and no hotly anticipated updates out of Europe, bond markets will have to look for guidance elsewhere. So far, it looks like bonds are at least cognizant of stocks, given the rising 10yr yields into the 9:30am stock market open. Yields have been falling since then with a reasonable amount of correlation to stock prices.
10's are currently at 1.7260 and Fannie 3.5's are off only 3 ticks on the day at 104-19. The rest of the session is very much a "wait and see" affair. Again, nothing of note on the calendar or radar, so we'll cautiously press on, but remain tuned in to any significant European headlines or noticeable shifts in the "risk on" trade that equities markets looked like they were trying to pursue overnight.
Interestingly enough, Treasuries drew their own line in the sand just barely over 1.74 and have bounced there 4 times since 4:50am New York time. If MBS have an analogous level it's probably 104-16 in Fannie 3.5's--the site of their only instance of ground-holding so far this morning.
With no economic data on the calendar, and no hotly anticipated updates out of Europe, bond markets will have to look for guidance elsewhere. So far, it looks like bonds are at least cognizant of stocks, given the rising 10yr yields into the 9:30am stock market open. Yields have been falling since then with a reasonable amount of correlation to stock prices.
10's are currently at 1.7260 and Fannie 3.5's are off only 3 ticks on the day at 104-19. The rest of the session is very much a "wait and see" affair. Again, nothing of note on the calendar or radar, so we'll cautiously press on, but remain tuned in to any significant European headlines or noticeable shifts in the "risk on" trade that equities markets looked like they were trying to pursue overnight.
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.
Roger Moore : "and reassign"
Roger Moore : "jd, you can cancel the case #"
Justin Dudek : "if a FHA case # was assigned prior to June 9th, can you get it released to go off the new MIP calc? or will it automatically go off the new calc"
Matt Hodges : "assume 1 point on retail site"
Gaius Rossini : "no clue - not looking at any rate sheet - just the main webpage they have for consumers"
Matt Hodges : "rebate?"
Gaius Rossini : "3.625 on the wells screen this morning"
Matthew Graham : "S&P's down a quick 5 pts in the first 10 min. bit of the old stock lever"
Jeff Anderson : "I heard Plaza was taking most MI transfers, but I'd check with them."
Dirk Postupack : "GM all......does anyone have a lender that is taking CMG Mortgage insurance transfers.....Everbank is no longer taking them and i need to find a home for this loan....currently being serviced by Cenlar"
Matt Hodges : "660-679 was a huge hit from .25 ---> 1.5"
Matt Hodges : "Ira said they came out after 5pm last night, valid on Monday locks...looks to be specific to lender"
David Gaffin : "GM all. I may be behind on this, but Chase issued new agency adjusters for cash-outs. Some are big hits. Is this new fannie stuff or investor specific? Thx"
Christopher Stevens : "I have a few LO's floating some loans"
Oliver S. Orlicki : "Me too"
Andy Pada : "Still have a bunch"
Andrew Benson : "anyone still floating anything?"
Thomas Quann : "Good thought MH"
Matt Hodges : "the numbers could look very good to her to get rid of MI and lower her rate"
Matt Hodges : "could she borrow against her 401K to do it?"
Thomas Quann : "She's close but not sure she has the liquidity. Interesting though no?"
Mike Drews : "I had my borrower pay down the principal to get rid of the MI last week, so this becomes a non-issue"
Mike Drews : "talk to your investor..but that 's the story i got from MGIC/Everbank"
Mike Drews : "just had this come up where my borrower was 2k away from 78%...it's really not up to the MI company, it's up to your new servicer"
Thomas Quann : "And the lender shares those findings with the MI company when applying for the transfer I assume. Remember no appraisal....you sure MD?"
Mike Drews : "dropping mi will now be based on the HVE value"
Jeff Anderson : "That's a good question. I'll email my UG rep to see what she says."
Thomas Quann : "Question for the early birds. Client has MI now and doing a HARP 2.0 for her with PIW. She is 34 more payments away from lender automatically dropping her MI. How is the tranferred MI on my new loan viewed? Will the MI company still drop it when her balance reaches that "X" number or do they know that it is a 122ltv and make her pay for hundreds of years? Anyone know the answer?"
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