MBS Live: MBS Afternoon Market Summary
Despite the relatively larger movement in MBS prices today, the underlying market events weren't all that dramatic.  Taking a step back, we're essentially left with the view that markets priced in the ECB news fairly well, regardless of it's attribution for a portion of today's risk rally and bond market sell-off.  From there, the weakness centered on the ADP release with the biggest moves of the day in volume and prices seen right at the 8:15am release.  Further data sets merely got out of ADP's way and markets were likely heartened by the fact that the ECB didn't repeat another "overpromise/underdeliver" scenario like they're last announcement.  Taking causality completely out of the picture for the moment, even technical levels suggest a circling of the wagons ahead of NFP.  Last week we noted a leveling off in a mostly sideways range with a potential to start "leading-off" on Friday.  We got the lead off, chased it a bit, but are now back to that same narrow, sideways range denoted by 1.61 to 1.69 in 10yr yields. 
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
105-23 : -0-11
FNMA 4.0
107-01 : -0-06
FNMA 4.5
108-03 : -0-04
FNMA 5.0
109-13 : +0-03
GNMA 3.5
107-31 : -0-10
GNMA 4.0
109-17 : -0-06
GNMA 4.5
109-22 : -0-03
GNMA 5.0
110-19 : +0-01
FHLMC 3.5
105-17 : -0-12
FHLMC 4.0
106-25 : -0-06
FHLMC 4.5
107-14 : -0-07
FHLMC 5.0
108-13 : -0-01
Pricing as of 4:04 PM EST
Afternoon 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 afternoon.
2:04PM  :  Surprisingly Narrow Range Following Morning Weakness
103-10 continues to be the dominant technical level for Fannie 3.0 MBS after the morning's sell-off. Earlier in the day, it offered support but has since become the mid-point of a surprisingly narrow range between 103-08 and 103-12. 10yr yields have similarly cut a narrow range since late morning from 1.66 to 1.68. Volumes have died down ahead of tomorrow morning's NFP data.

It's interesting to consider that narrow ranges mentioned above are behaving very similarly to ranges over the last 3 months. Consider 10yr yields for instance. The central tendency has been squarly on 1.55-1.68. Just like there have been breakouts on either side of TODAY's central pivot points, so too have there been breakouts from the longer term central range. The fact that we're back in that range and that yields are seeming to pay attention to pivot points (i.e. big bounce at 1.55 a few days ago and now holding ground near 1.68 today) seems to suggest bond market's preference for neutral territory ahead of market-moving events.

Granted, this is the weakest side of neutral territory and that's no fun for day to day changes in MBS/Rates, but the saving grace is that current levels make sense in the technical framework and "feel" worse than they are after bond markets came off the more aggressive end of the range on Monday.
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.
Andrew Russell  :  "the issue is we are in an industry that should allow a salesman to be compensated based on the revenue. The client has the option if they do not like the terms which are clearly disclosed to use someone else's services if they choose. If you want to make 3 points on one deal, and .5 on another...that is your choice...the mortgage broker was proven innocent by Harvard independent studies yet the media seems to still point at the broker for the collapse, if they spent more time focusing on job g"
Adam Quinones  :  "dont focus solely on the mkt."
Adam Quinones  :  "g-fees are coming"
Nick Solis  :  "wow just got this mornings ratehseets Im off over .5 in price wow"
Scott Rieke  :  "I agree with MG - its a cheap option. If you get the move following the actual event (more than a .25) you can relock. Otherwise, if the mkt moves the other direction, you're locked"
Matthew Graham  :  "Doesn't make much sense to try to predict trends in this market."
Gus Floropoulos  :  "thats a warning"
Matthew Graham  :  "I'd consistently lock ahead of big-ticket events when rates are close to monthly and all-time lows. Thus, I actually put a lock bias into the consumer post last night--something I rarely do overtly."
MC  :  "that a trend prediction MG?"
Matthew Graham  :  "if NFP works against us, AND FOMC works against us next week, then floating today could get pretty rough. Them's the risks"
Gus Floropoulos  :  "yep, MG, my theory is whatever u do, do it consistantly"
Adam Quinones  :  "what Gus said."
Gus Floropoulos  :  "meaning they r not risking it going into NFP"
Matthew Graham  :  ""not locking on down days" can work out sometimes. Other times, down days lay at the beginning of down trends"
Nick Solis  :  "AQ, meaing they dont want it to slide more"
Adam Quinones  :  "basically that tells you secondary is locking."
Adam Quinones  :  "if it helps...hedgers have been pretty active today. Approaching 2bn in supply before noon."
Nick Solis  :  "im sitting on a family loan too, have to say I agree with Gus, dont lock on down days, its always bites me."
Gus Floropoulos  :  "Im floating, but everyones risk tolerance is different...my approach is never lock on a down day"
Oliver S. Orlicki  :  "vb, floating into tomorrow?"
Brett Boyke  :  "still a long way to go both domestically and overseas "
Brett Boyke  :  "had to step away - re: S&P - wasn't saying I have the same optimism"
Jerry T  :  "BB, S&P is bursting at the seams. Earnings are not supporting this rarified level in the markets"
Brett Boyke  :  "the stock markets are forward looking indicators, so that portends better times ahead"
Victor Burek  :  "obama is gonna know the nfp number before that speech..can make it real interesting to see if he lets something slip"
Brett Boyke  :  "Just in time for the speech tonight"
Victor Burek  :  "it should, its not like the economies aroudn the world are slowing"
Brett Boyke  :  "S&P hits 4 1/2 year high"
philip mancuso  :  "on another note, I've been interested in all the volume talk recently. If I'm not mistaken year over year apps are pretty similar. I'm just surprised so many people say they are so busy. must be churners. Frankly, if anything we are slower than a year ago on a % basis. Obviosuly with most states and a few more los, we are up. for the guys who are saying they are busiier this year, do you have some color on that? is it all self gen?"
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