MBS Live: MBS Afternoon Market Summary
Bond markets were awakened just before the domestic session, not by a bucket of cold water, but more like some evil crucible of lava and ill-tempered lava-proof scorpions (or whatever else you might imagine that's way WAY worse than a simple old bucket of cold water).  If you imagine the sort of cliche movie scene where a big mechanical contraption undergoes catastrophic failure to hilarious effect (leading candidate here is the spinny ride from the Sandlot), that's what trading conditions looked (and smelled) like this morning.  The spinning finally stopped most convincingly around 9:30am--at least enough for market participants to get off the ride.  From there, we saw solid gains (back from even more solid losses) into the 3pm hour.  Ominously, neither MBS or Treasuries made meaningful headway into Friday's levels, and in fact seemed blocked from reentry.  That'll be extra ominous if it continues to be the case tomorrow.  When all was said and done, we had a nice little rally from 9:30am, but end the day in negative territory due to the massive sell-off leading into 9:30am. 
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
96-05 : -0-20
FNMA 3.5
99-31 : -0-15
FNMA 4.0
102-29 : -0-16
FNMA 4.5
105-07 : -0-13
GNMA 3.0
96-27 : -0-25
GNMA 3.5
100-14 : -0-21
GNMA 4.0
103-03 : -0-11
GNMA 4.5
105-06 : -0-14
FHLMC 3.0
95-29 : -0-21
FHLMC 3.5
99-26 : -0-16
FHLMC 4.0
102-24 : -0-16
FHLMC 4.5
104-13 : -0-11
Pricing as of 4:06 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.

3:35PM  :  ALERT ISSUED: Fading Slightly After Hours. Reprice Behavior May Vary
Fannie 3.5s are down 12 ticks from recent highs. On almost any other day in history, that'd be good for widespread negative reprices. Today, however, the "widespread" part is less of a certainty, though we may be at risk for a few. That will depend on how recently the last reprice came in and how nimble the lender in question normally is.

Bottom line, there's some growing risk as the rally abates, but no massive, panicky afternoon sell-off (Fannie 3.5s at 100-00 still 24 ticks off morning lows). Bigger picture, it's a negative daily technical picture given that MBS were generally capped by Friday's lows and that Treasuries were unable to break back below Friday's high yields, so we wouldn't assume today marks "the turn" in rates just yet.
1:49PM  :  ALERT ISSUED: 'Claw Back' Trend Continues After Fisher Comments
Much like the Grinch returned presents to Whoville after experiencing varying levels of atrial and ventricular growth, Dallas Fed Pres Fisher--despite the fact that he didn't make too much sense--at least managed to say things about the current state of affairs that were detectably less damning. Apologies if that sentence requires multiple re-reads, but to summarize: Fisher spoke. Coulda been worse...

Volume and movement clearly came in to both equities and bond markets in the recently familiar "cash off the sidelines" sort of way. Stocks and bonds improved together, and are continuing to do so. MBS is on the same train (or perhaps it's a sleigh a la Grinch?).

In for a dime, in for a dollar on this analogy, so let's just say that although Bond markets aren't happy about having antlers stapled to their head, at least they're heading in a more optimistic direction in the short term (hope that made sense... if not, watch the Grinch...the old animated one).

10's are down to 2.555. Fannie 3.5s are closing in on 101-00, currently "only" down half a point at 99-31, and Fannie 4's are down 15 ticks at 102-31. Positive reprices are an ongoing possibility.
12:25PM  :  ALERT ISSUED: Clawing Back Some Losses; Positive Trend For Now
Since bottoming out shortly after the open, MBS have been scratching, biting, and clawing their way out of the pit of despair. Versus earlier lows of 99-08, Fannie 3.5s are up to 99-22 now (which was enough for one lender to reprice already).

10yr yields continue making lower highs, now down to 2.597. The first resistance pivot is at overnight lows of 2.58. From there, it's a woefully big 'next step' down to 2.51-2.52 at Friday's high volume 3pm highs. One step at a time though...

For now, we have the consolidation we were looking for--or at least the early stages of it. There's no guarantee it will continue, but for now it's sufficient for some positive reprice potential for some lenders. Most, however, will need more of two things before pulling the trigger: time and gains.
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.

Eric Franson  :  "REPRICE: 3:26 PM - Wells Fargo Better"
Nate  :  "REPRICE: 3:22 PM - Chase (retail) Better"
Eric Lao  :  "REPRICE: 2:49 PM - Flagstar Better"
Matthew Graham  :  "REPRICE: 2:46 PM - Plaza Better"
David Dickens  :  "REPRICE: 2:15 PM - Real Estate Mortgage Network Better"
Joe Bydzovsky  :  "REPRICE: 12:49 PM - Freedom Mortgage Better"
Hamid Hamrah  :  "REPRICE: 12:48 PM - PennyMac Better"
Eric Franson  :  "REPRICE: 12:39 PM - Wells Fargo Better"
Frank Guirguis  :  "REPRICE: 12:33 PM - Flagstar Better"
Matthew Graham  :  "RTRS- FED'S KOCHERLAKOTA SAYS SPEAKING OUT TO CLARIFY WHAT HE VIEWS AS A MIS-PERCEPTION IN MARKETS THAT THE FED HAS BECOME MORE HAWKISH, BASED ON REACTION TO LAST WEEK'S MEETING "
Matthew Graham  :  "RTRS- FED'S KOCHERLAKOTA SAYS MARKET REACTION TO FED DECISION LAST WEEK NOT A CAUSE FOR CONCERN THUS FAR, BUT COULD OBSTRUCT ECONOMY IF HIGHER YIELDS WERE TO HARDEN OVER TIME "
Matthew Graham  :  "RTRS- KOCHERLAKOTA SAYS MAY BE APPROPRIATE FOR FED TO BUY ASSETS EVEN AFTER UNEMPLOYMENT FALLS UNDER 7 PCT "
Matthew Graham  :  "RTRS- KOCHERLAKOTA SAYS SEES NO CONTRADICTION BETWEEN HIS RECOMMENDATION AND BERNANKE NEWS CONFERENCE REMARKS LAST WEEK "
Matthew Graham  :  "RTRS- KOCHERLAKOTA SAYS FED SHOULD KEEP BUYING BONDS UNTIL JOBLESS RATE UNDER 7 PCT, PROVIDED INFLATION OUTLOOK UNDER 2.5 PCT "
Matthew Graham  :  "RTRS- FED'S KOCHERLAKOTA SAYS FED HAS NOT PROVIDED ENOUGH DETAIL ABOUT HOW POLICY WILL PLAY OUT WHEN ECONOMIC RECOVERY IS MORE ADVANCED "

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