For what seems like the first time in a long time, Treasuries are the noticeable underperformer today in the sense that they're weaker of their own accord. Stocks certainly haven't rallied enough to suggest a 5bp hike in 10yr yields, nor has the Euro. Even Treasuries' most stalwart companion from a correlation standpoint, German Bunds, haven't suggested (or followed) the same level of volatility so far this morning. Just heading into the 11am hour now and a bit of additional Treasury weakness is cropping up following the Fed's scheduled "twist" buying in the long end. Thankfully though, MBS are doing their "stuck in the mud" routine with Fannie 3.5's just a tick away from the gravity well at 105-00. 3.0's similarly supportive levels rest between 102-16 and 102-13 and 3s currently trade at 102-14. We're sensitive to further weakness in Treasuries ultimately forcing MBS to capitulate somewhat to lower prices. Prospects for that increase if 10's break above their earlier highs near 1.67 and if that happens, we're feeling defensive heading into the noon hour.
MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing
is available via MBS Live.
Pricing as of 11:06 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
Bond Markets Weaker Overnight And This Morning. Data Calendar Empty
With all of the potential market moving events mentioned in The Day Ahead
having come and gone, bond markets moved from a flat Asian session to a slightly weaker European session.
The weakness continues now in the domestic session, and is currently contending with a small risk rally after the ECB loosened ratings requirements for asset-backed securities. The Euro experienced it's biggest spike of the session. Equities followed, and bond markets are doing their best to hold underneath earlier morning weak spots, but look like they might be failing presently
10yr yields were as high as 1.6588 earlier this morning but just now broke above 1.66. There's additional overhead support at 1.69, if things continue to deteriorate. Fannie 3.5's are down 5 ticks on the day at 104-29 as are 3.0's at 102-13, noticeably firmer to Treasuries
There are no significant events left on the calendar for today, so it's either headline-watching or setting up for next week's supply.
Live Chat Featured Comments
Grant R. Menard : "We had to do a few borrower paid and make peanuts on them. "
Grant R. Menard : "Yes it does Chris. Small loan amounts are a no go imo"
Christopher Max : "Does the full 1.75% FHA premium count against high cost? We are running into an issue in MA. Small Loan amount"
Dean Gorenflo : "4155.1 6.C.1.a - Description of a Streamline Refinance - Streamline refinances
are designed to lower the monthly principal and interest payments on a current FHA-insured mortgage, and
must involve no cash back to the borrower, except for minor adjustments at closing that are not to exceed $500."
Andy Pada : "does it have to be AUS approved or manually underwritten?"
John Paul Mulchay : " No appraisal"
Andy Pada : "so not streamline"
Dean Gorenflo : "standard FHA credit rules instead of using the report for pricing only"
Dean Gorenflo : "w2's, pay stubs, bank statements...."
Ira Selwin : "Chase memo: Chase Correspondent continues to accept Chase Serviced and Non-Chase Serviced credit qualifying FHA Streamline Refinances.
We appreciate your partnership with Chase Correspondent Lending."
Matthew Graham : "RTRS- ITALY PM MONTI SAYS HOPES MARKETS UNDERSTAND THE EURO IS HERE TO STAY "AND WE ALL MEAN IT" "
Andrew Horowitz : "yeah its gonna be hot in the Northeast again"
Adam Quinones : "I foresee an early exit"
SMTM : "anything on the books today? Forcast?"
Matthew Graham : "Euro seems to like it"
Matthew Graham : "RTRS - ECB -AUTO LOANS, LEASING AND CONSUMER FINANCE ABS AND ABS BACKED BY COMMERCIAL MORTGAGES WHICH HAVE SECOND-BEST RATING OF A WILL BE ACCEPTED, HAIRCUT 16 PCT "
Matthew Graham : "RTRS- ECB - REDUCES RATING THRESHOLD FOR ABS "