It was a surprisingly uneventful month-end Friday for MBS and broader markets alike. Stock prices and bond yields rose moderately overnight on positive Draghi comments and Germany's lower Parliament approval of the Greek bailout deal. Things reversed into the domestic session, first for Treasuries as domestic accounts were lined up for some month-end buying. Stocks hit their highs within 5 minutes of the cash open and traded a choppy but linear range downward, just avoiding overnight lows. MBS held a 5 tick range for the entire session and experienced a much more sideways version of the moderate volatility seen elsewhere. Data and headlines had little impact and markets even managed to not pay too much attention to Fiscal Cliff anecdotes, ostensibly preferring month-end trading considerations, and possibly beginning to set the bar a bit higher for the actual nuts and bolts of Fiscal Cliff news.
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 4:03 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
MBS Winning Consolation Prize For A Rough November
November has been a fairly rough month for MBS in terms of their relative performance to the rest of the bond market. This phenomenon is largely owing to the vast outperformance seen following the QE3 announcement.
But today has seen a small correction in the broader trend of November's underpeformance. Fannie 3.0s found reasonably strong support at 105-04 and have retested on several occasions into the afternoon in spite of relative weaker Treasuries.
Now that Month-end buying is bringing some money back into the market (on both sides, stocks and bonds), everything is improving in concert. Fannie 3.0s are currently up 5 ticks at 105-08. At that level, we wouldn't rule out positive reprices though morning rate sheets were in better territory and Friday afternoon's aren't typically an aggressive time frame for positive reprices.
Pondering the positivity, perhaps markets have been waiting to make sure there wouldn't be any meaningful congressional tape-bombs concerning the Fiscal Cliff? If that's the case, then it should synergize with month end buying and we could see additional gains, or maybe we're looking at those gains right now. Bottom line, MBS are at their highs of the day. Happy Friday.
Obama Says Not Acceptable For "Handful Of Republicans" To Block Fiscal Deal
(Reuters) - President Barack Obama accused a "handful of Republicans" in the House of Representatives on Friday of holding up legislation to extend tax cuts for middle-class Americans in order to try to preserve them for the wealthy.
"It's not acceptable to me and I don't think it's acceptable to you for just a handful of Republicans in Congress to hold middle-class tax cuts hostage simply because they don't want tax rates on upper income folks to go up," Obama said.
Measured Weakness Following Fed Buyback, But Holding Ground
As can occasionally be the case, we saw a small but detectable blip of weakness following the 10:15-11:00 scheduled Fed buyback. The best look at the effects is in the 30yr Treasury chart (today's operation was the "long" version in 25-30yr maturities), and there was a bit of spillover to 10's and MBS.
But Fannie 3.0s are holding their ground thus far at 105-06 after having briefly dipped to 105-04. 10yr yields moved up to their high yields of the day at 1.6147 but have failed to break any higher.
Live Chat Featured Comments
Clayton Sandy : "REPRICE: 2:47 PM - Provident Funding Better"
Jason Harris : "as it stands now there is no MIP refund if you go from FHA to any other loan type..."
Jason Anker : "Bryce & ted are 100%. Fha to Fha only. "
Ted Rood : "You only get a credit IF you refi to another FHA within a 36 month period, and it is prorated down month by month during that time."
Ted Rood : "Pretty sure the MIP credit is gone for loans closed prior to 2004."
Bryce Schetselaar : "only on FHA to FHA"
Mario Ingraffia : "Random Question: I have a borrower whom purchased a home with FHA. about 7 months ago. Now has funds to go conventional but he is wondering if we go conventional if he will get any of is orginal UFMI refunded back to me? Any insight?"
Daniel Cruz : "REPRICE: 1:34 PM - Flagstar Better"
Scott Valins : "Roland I'm gonna give Byte a shot"
Matthew Graham : "RTRS- BOEHNER: "THERE IS A STALEMATE; LET'S NOT KID OURSELVES" "
Roland Wilcox : "buildling on SV's LOS inquiry - any recs for LOS best for mom & pop shop? Using Encompass now and feeling the sw best suited for much larger operation. Thx!"
Andy Pada : "I feel "the campaign is over Mr. President..." from the Speaker"
Andy Pada : "i'm sure Speaker Boehner's speech should give us a nice bump"
Matthew Graham : "RTRS- U.S. HOUSE SPEAKER JOHN BOEHNER TO SPEAK TO REPORTERS AT 12:45 EDT TO RESPOND TO PRESIDENT OBAMA ON FISCAL CLIFF "
Matthew Graham : "recommend wariness over panic"
Jeff Anderson : "Wary is Greater than panicked? Or Less Than?"
Matt Hodges : "would love to see it, but feeling uneasy"
Victor Burek : "i'm with vg"
BVG : "nah--- gunna be 105-9 at close"
Matt Hodges : "feels like we will slide rest of afternoon, finishing 105-00 or so"