After improving slightly during yesterday's first few trading hours, bond markets have been in the same aggressively sideways trend for over 24 hours. An "Inside Day" is a shorthand way to say that the current session's prices/yields are INSIDE the previous session's highs and lows. It can connote a trendless market, consolidation, or at the very least, an as-yet uncommitted range trade. Both MBS and Treasuries pushed the positive ends of that range heading into the opening bell for stock exchanges and gave up a bit of ground after stocks improved around 9:45am. The Fed's scheduled "Twist" buyback helped Treasuries put a few bricks in ceiling, suggesting a similar display of metaphorical masonry from MBS, but on the floor instead of the ceiling. Fannie 3.0s held onto 104-10--the same floor of support seen yesterday afternoon. The first, best chance for these ranges to break on either side is the 10yr Auction coming up at 1pm.
MBS Pricing Snapshot
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Pricing as of 11:09 AM EST
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Bond Markets Continue Rangebound Path Ahead Of Auction
Once again, we're coming off an overnight session that saw limited volume and volatility compared to what one might hope for in the wake of last week's big shake-up. At least the small amount of movement seen, has generally been in a friendly direction.
Overnight 10yr yields made it only as high as 1.89 while equities futures continued to grind against the same highs as yesterday's pre-market session. 10's hit the domestic session essentially unchanged, and for all intents and purposes continue to be unchanged from 5pm levels at 1.867. MBS had been perfectly unchanged until the past few minutes brought Fannie 3.0s down 2 ticks on the morning to 104-11. Even so, this is well within the narrow range set up between yesterday's 10AM highs and afternoon lows (a scant 4 ticks from 104-11 to 104-15).
There are no significant pieces of data out this morning, though a Fed "Twist" buyback will begin at 10:15, finishing at 11:00am. The biggest event of the day for Treasuries will be the 10yr Auction at 1pm. The headline alludes to the possibility that bond markets are rangebound in anticipation of that auction. We'd emphasize "possibility." All we can say about it now is that it's "the next big thing," and while it could be the biggest motivator of the week so far, there's no guarantee it will be.
Live Chat Featured Comments
John Tassios : "points and fees capped at 3%"
John Tassios : "I am hearing that YSP may not be included in the "
Scott Valins : "as are points and fees. If they cap fees at 3% and include lender paid comp as part of it could result in big problems for wholesale channel"
Jason Roaldson : "Yes. That QM announcement is HUGE."
Scott Valins : "anyone else on pins and needles about the pending CFPB announcements?"
Jason Anker : "same"
John McClellan : "might as well put down the extra 5%"
John McClellan : "we do...but MI and LLPA are crazy"
Jason Anker : "FNMA 10/2012 matrix says 85% max LTV Noo 1 unit purchase. "
Jeff Weaver : "Any investors go to 85 LTV non owner occupied 1 unit? "
Jason York : "https://www.sam.gov/portal/public/SAM/"
Victor Burek : "my processor has a question regarding the GSA search site..says it takes him now to a different site now...is there a new site for GSA searches?"
Victor Burek : "Obama chooses Lew as new Treasury Secretary"
Victor Burek : "under 625k is .35"
Victor Burek : "sorry... .6"
Victor Burek : ".35"
MMNJ : "so you guys can save me from digging: how much is the monthly MIP for FHA $700K loan amount LTV <90 for a 15 yr?"