Treasury yields rose into scary territory overnight and remained fairly scary even in the morning hours as 10's pushed up over 2.05 after the stronger-than-expected Jobless Claims report. MBS were hanging a bit tougher by comparison, never dipping below yesterday's weakest levels. Both sides of the market managed to shake off the post-claims selling spree and get back in line with yesterday afternoon's range though 10's began drifting a bit higher in yield leading up to this afternoon's 30yr auction. But even before the auction, short-covering in Treasuries began kicking in in grand fashion, fueling a nice little "rally before the real rally." The real rally in this case came after the strong 30yr Auction though we'd be incredibly careful to note here that there's a 3-day weekend ahead and trading screens only look so green because they've been so red recently. MBS are still under 103 and 10yr yields are still toeing the line at 2.0.
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 3:15 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
NY Fed Agency MBS Weekly Summary
Gross purchases from February 7 through February 13: $20,600 million
Sales (dollar rolls) from February 7 through February 13: $1,800 million
Net purchases from February 7 through February 13: $18,800 million
Strong 30 Auction, Indecision Giving Way To Positivity
Treasury volumes climbed steadily leading up to the auction as fast money accounts (leveraged, tactical, hedge-fund types), covered shorts from 12:40 right up to 1pm. The results were strong with bid-to-cover well over recent averages (2.74 vs 2.6) and the yield award 0.4 bps lower than the 1pm consensus (or the "when-issued" yield levels).
Traders quickly bid the long end up just slightly after the result, but then sold it again,just below the levels at which the earlier short-covering rally began. MBS had already moved up to 102-27 (+0-08) ahead of the auction and are still there, as Treasuries attempt to figure out which way they're headed.
After the sufficient head fake for fast money profit taking, the yield trajectory is heading down again now (we think?). In any event, WI 30's just hit their lows, 10yr yields hit their lows moments ago, breaking resistance, and all of the above should help MBS do the same. This paves the way for potential positive reprices if maintained into the afternoon.
Live Chat Featured Comments
Nate Miller : "REPRICE: 2:37 PM - Freedom Mortgage Better"
Eric Franson : "REPRICE: 2:36 PM - Wells Fargo Better"
MortgageMan007 : "REPRICE: 2:32 PM - Fifth Third Mortgage Better"
Tom Schwab : "REPRICE: 2:16 PM - Franklin American Better"
Ethan Brizzi : "REPRICE: 2:14 PM - Plaza Better"
Clayton Sandy : ".25% better on the day so far. "
Clayton Sandy : "REPRICE: 1:56 PM - Provident Funding Better"
Tom Schwab : "REPRICE: 1:56 PM - AMC Better"
Nate : "REPRICE: 1:54 PM - Chase Better"
Clayton Sandy : "REPRICE: 1:50 PM - Stearns Lending Better"
Chip Harris : "REPRICE: 1:43 PM - Sierra Pacific Better"
Chip Harris : "REPRICE: 1:42 PM - Interbank Better"
Mike Ford : "MG, that analogy is perfect!"
Matthew Graham : "I guess I'd look at it this way BLF (and I'm surprised i haven't used this analogy before), but if you got a notification from your bank that money was being quickly spent from your account, you'd probably call them right away to freeze it, but if you noticed large deposits, you might wait to make sure they're real before spending them."
Bromi Krock : "heavy hand on the way down and nice and light on the way up."
Bryan LaFlamme : "It still makes me laugh; comparing the pace of negative and positive reprices."
Eric Lao : "REPRICE: 1:32 PM - Flagstar Better"
Scott Rieke : "looks like people are rotating out the curve - front-running the fed of course"
Victor Burek : "santelli gave it an B+"
Matthew Graham : "I would say A, A- considering the back-up overnight and the 36% indies"
Oliver S. Orlicki : "Grade?"
Jeff Anderson : "Rock n' roll. Cue the Rocky music. "
Matthew Graham : "RTRS- US TREASURY - PRIMARY DEALERS TAKE $7.85 BLN OF 30-YEAR BONDS SALE, INDIRECT $5.81 BLN "
Matthew Graham : "RTRS- U.S. 30-year bond BID-TO-COVER RATIO 2.74, NON-COMP BIDS $19.42 MLN "
Matthew Graham : "RTRS- U.S. SELLS $16 BLN 30-YEAR BONDS AT HIGH YIELD 3.180 PCT, AWARDS 85.20 PCT OF BIDS AT HIGH "
Matthew Graham : "this'll work I think!"
Matthew Graham : "3.186 WI 30's, I think. 3.187 maybe"
Oliver S. Orlicki : "Good auction???"
Clayton Sandy : "REPRICE: 12:51 PM - Provident Funding Better"
Nate Miller : "mbs sasquach, don’t scare it away"
MortgageMan007 : "c'mon people the first rule about green on mbs club, is we don't talk about green on the mbs club"
Charles Tadros : "3% for now"
Raul Lopez : "GREEN!!!!!!!!!"
Dena Zeman : "sorryif this i a dumb question, but should I look at the 3.5 or 3.0 under FNMA?"