MBS Live: MBS Afternoon Market Summary
MBS walked in the door in positive territory this morning and are currently heading out the door in roughly the same shape.  That nearness to opening levels belies the intraday volatility however.  This began with a rally to the best levels of the year for both MBS and Treasuries.  Lackluster Chicago PMI helped everything move together in a risk-off direction after the cash open in Stocks (risk-off implies bond rally and stock selling).  Some of the levity in Treasuries was attributed to short positions (those betting on higher rates) getting stopped out (being forced to buy, covering their short to protect against further losses).  Whether or not that was a warning that 1.638% in 10yr yields was tenuous and temporary will never be known as Apple's corporate bond offering took center stage around the same time that Treasuries and MBS began moderating their rally.  This made for a fairly quick trip from 1.64-ish to 1.68-ish, which is uncommonly volatile for short, intraday time frames of late.  Despite the choppiness, 1.679 held up twice as a supportive ceiling, helping MBS dig their own heels in at 104-18+ and keeping the range narrow from Noon on.  Just a reminder: things get progressively more serious with each passing day this week.  Tomorrow brings ADP in the morning and FOMC in the afternoon.  ADP's new methodology is increasingly being accepted as "better than it was," so big reactions are a serious possibility on a big miss or beat.
MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
FNMA 3.0
104-19 : +0-02
FNMA 3.5
106-17 : +0-00
FNMA 4.0
107-00 : -0-02
FNMA 4.5
107-25 : -0-03
GNMA 3.0
106-13 : +0-04
GNMA 3.5
108-29 : +0-01
GNMA 4.0
109-14 : -0-03
GNMA 4.5
109-01 : -0-03
104-05 : +0-01
106-09 : +0-01
106-23 : -0-02
107-01 : -0-03
Pricing as of 4:05 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.

2:46PM  :  Several Hours Of Stability Follow Earlier Weakness; Month-End Ahead
After losing almost all of the day's gains heading into the noon hour, MBS have managed to hold steady since then. Apple's colossal corporate bond offering (a record $17 bln) contributed to a bounce back from the best levels of the year at 10am. The bounce was already underway, but as the Apple deal gained snowball status, more Treasury bids were pulled in favor of Apple ($50bln vs $17bln on offer--quite a bid-to-cover for the corporate bond world).

The snowball clearly stopped rolling at noon and we've been sideways ever since. MBS have had some level of desire to continue outperforming Treasuries into month-end. Fannie 3.0s are 3 ticks positive on the day at 104-20 while 10's are just in the red at 1.670 even. The first volatility surrounding month-end flows could be seen at 3pm, but can continue through 5pm.
11:53AM  :  ALERT ISSUED: Additional Reprice Risk As MBS Shed Another 2 Ticks
Just a quick note considering the last alert held it out as an impending possibility--we just lost the next 2 ticks in Fannie 3.0s, taking us down to +1 tick on the day at 104-18. We would expect some negative reprices at these levels, assuming they hold for more than a minute or two, and more widespread reprices at 104-16.
11:44AM  :  ALERT ISSUED: MBS Hit Weakest Levels Of The Day. Negative Reprice Risk Increasing
It will likely be a bit too soon for most lenders, but this is a heads up that we're now .125 of a point or 4 ticks off the highs at 10am--a time of day that coincides with many lenders taking marks for rate sheets. The change in Fannie 3.0 is 104-25 to 104-21.

10yr yields have risen fairly quickly from 1.638 to 1.67 since 10am. For now, both sides of the market look to have bounced at 10am and are now trending lower in a fairly linear fashion. If this linear trend continues for another 2 ticks in Fannie 3.0 MBS, negative reprices would become more likely for some lenders, and significantly more likely with another 2 ticks beyond that (which would be a target of 104-18 and 104-16 respectively).
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.

Scott Valins  :  "very helpful"
Scott Valins  :  "thanks Ben"
benjamin levin  :  "three options to exclude use last option if on tax returns"
benjamin levin  :  "page 514"
benjamin levin  :  "https://www.fanniemae.com/content/guide/sel040913.pdf"
benjamin levin  :  "Look at the personal and business tax returns, if there is a deduction on the tax returns for it regardless wether its a lease or loan they should exclude otherwise you are double hitting him for a liability and loosing income"
Ryan Kelly  :  "The guide states liabilities, not installment loans can be omited with 12 month proof of payments"
Scott Valins  :  "hey guys - my u/w is telling me we can't ignore a car lease payment with 12 months proof of paid through biz. Is she right? I always thought we could omit regardless of lease status"
Rob Clark  :  "30 year fix only"
Rob Clark  :  "REPRICE: 12:21 PM - Provident Funding Worse"
Matthew Graham  :  "pitcher turned toward first base... lead off corrected, same count, same inning, etc..."
Jeff Anderson  :  "Weren't we only under where we are last year with a much higher "fear factor"? Pretty quiet on the econ catastrophe calendar the last few weeks. I'm surprised and cautious where we are now, to be honest."
Christopher Stevens  :  "REPRICE: 12:19 PM - Flagstar Worse"
Matthew Graham  :  "yeah, still pretty quiet IMO. the run into 10am was kinda spiky. Big boys would have alredy taken marks at 104-22, and we're not that far off . "
Victor Burek  :  "we are still only 6 ticks from high to lows..graph makes it look worse"
Christopher Stevens  :  "today was supposed to be one of those quiet days before the chaos starts tmrw right?"
Ted Rood  :  "Anything we got on AM rate sheets likely to evaporate soon."
Andrew Horowitz  :  "1.60 is definite resistance on my charts as well, just seems to want to hold onto the 1.64-1.67 range lately"
Matthew Graham  :  "I see 1.64-1.67 as the "lead off" territory with the next true technical targets something closer to 1.60 and 1.55. That said, I've read the same elsewhere, and when people start agreeing, it's usually better to start doubting."
Andrew Horowitz  :  "taking slow steps, but 1.65 has been resilient"
Victor Burek  :  "give it time, market will eventual need that air below 1.65"
Victor Burek  :  "not too long ago the air below 1.70 was troublesome"
Andrew Horowitz  :  "the "air" below 1.65 seems to be troublesome"
Victor Burek  :  "possibly jeff"
Jeff Anderson  :  "VB, you considering locking those loans you closed in March yet?"

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