MBS Live: MBS Afternoon Market Summary
Both Treasuries and MBS continued the trend of post-NFP improvements today, paradoxical though they may be.  The only apparent threat to the postivity was seen heading into the 10am hour when bond markets hit and held their weakest levels of the day for roughly 2 hours. 

But just as the stronger levels of the morning proved to be tough to break, so too did the weaker levels set up support on the other side of the range, and gains were made into the afternoon. 

MBS stalled out just before breaking morning highs and Treasuries did just slightly better.  From a technical standpoint, we're rapidly approaching the the stronger side of the trend in Treasuries.  This is the first of two resistance targets for 10's following the supportive NFP bounce.

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
95-26 : +0-08
FNMA 3.5
100-07 : +0-08
FNMA 4.0
103-27 : +0-10
FNMA 4.5
106-20 : +0-08
GNMA 3.0
96-30 : +0-08
GNMA 3.5
101-12 : +0-09
GNMA 4.0
104-21 : +0-09
GNMA 4.5
107-06 : +0-06
95-14 : +0-09
100-00 : +0-08
103-19 : +0-10
106-14 : +0-10
Pricing as of 4:04 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.

1:22PM  :  Bond Markets Near Best Levels After 3yr Auction, though Probably Not Because of it
10yr yields drifted toward the 3yr auction with a slight downward trajectory. Nothing changed about that momentum or the volume with which it was trading (fairly light) until well after the results were out. Treasury futures volume and prices spiked around 1:14-1:15pm, suggesting the move was unrelated to the auction.

Whatever the case, it brings Treasuries back to their best levels of the day near 2.80 and MBS fairly close, with Fannie 4.0s up 10 ticks at 103-28.
11:00AM  :  Bond Market Snowball Ran Out of Steam; Early Hint of Negative Reprice Risk
Fannie 4.0s have fallen to levels just on the edge of negative reprice risk for some lenders. This heavily depends on the time of day that an initial rate sheet came out. Fannie 4.0s are up 4 ticks on the day, but down 4-5 ticks from the morning's highs and 3-4 ticks from the first wave of lender rate sheets.

If we leveled-off here for the day, we'd probably avoid reprices, but the risk that we won't is reinforced by 10yr yields prodding at their highest levels of the day. Just as momentum carried us in one direction earlier today, it can take on a life of its own if it begins heading too far in the other direction. 10's are currently still 4 bps lower on the day, but up from 2.80 to 2.817 in the past hour.

A potential budget deal in the Senate may contribute to selling pressure if more developed headlines come across.
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.

Erik Forgue  :  "Senate Banking Commitee Live if interested http://www.banking.senate.gov/public/index.cfm?FuseAction=Hearings.Hearing&Hearing_ID=528c6bdb-59eb-4357-8a42-12a016b017f7"
Hugh W. Page  :  "Thanks! That was the form I was looking for 23 and 22 it is"
Sung Kim  :  "http://www.mgic.com/pdfs/71-40323-cashflow-sam_final.pdf"
Ira Selwin  :  "23 for 2012, 22 for 2011"
Hugh W. Page  :  "Borrower has $4K in Unreimbursed Exp but 2500 Bus Miles are part of that and we can give it back at a certain rate that escapes me at the moment but 22 sounds right"
Chip Harris  :  "I've never seen an UW give that back. Would love to be able to though."
Hugh W. Page  :  "no the number we're allowed to use to give credit back"
John Paul Mulchay  :  "Not this? http://www.irs.gov/pub/irs-pdf/i2106.pdf"
Sung Kim  :  "its 21 or 22 i think"
Hugh W. Page  :  "Anyone remember the Business Mileage number I can use for credit back for 2106 Expenses? 22.5 cents sticks in my mind but I'm not sure."

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