Surprisingly enough, after the government shutdown, both Treasuries and MBS are back to levels they were trading at- well--before the shutdown. To be fair, these levels were seen during the first half of the shutdown as well, but certainly began evaporating toward the end. This happened primarily due to short term funding markets going on a ride that was roughly twice as wild as the last debt ceiling showdown. Perhaps markets are losing their patience?
Whatever the case, the significantly more expensive short term cash made the long term cash behind mortgage rates slightly more expensive until a deal came into view yesterday. With the deal inked, traders tripped over themselves to get back into the shortest term debt. 1-month Treasuries, for instance, were at a lofty .14% earlier this morning and now sit at a "like it never even happened" level under .03%. Cheap funding is good for rates, as is the technical momentum created by the move. The backdrop of an FOMC whose most hawkish members say it's probably a good idea to hold off on tapering doesn't hurt either.
The jobs report will be out on Tuesday and stands as the next significant guidance giver (just like it did in late September when we still didn't know if it would show up on time. The next two days are a bit of a wild card.
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, Treasuries Near Best Levels; S&P Over All-Time Closing Highs
10yr yields have again edged into the 2.59's but just barely (2.598 currently). Meanwhile the the S&P is trading above its all time closing high and MBS are at their highs of the day.
There has been little, if any volatility for bond markets so far. The steady positivity is just enough to consider positive reprice potential from a few lenders, though we'd emphasize that lenders are more likely to "pace themselves" when it comes to getting these gains back on to rate sheets.
Live Chat Featured Comments
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