After Friday's initial NFP-inspired volatility, bond markets had settled into a very narrow sideways range in anticipation of the next big piece of guidance.  The leading suspect among potential guidance givers was today's Congressional Testimony from Fed Chair Yellen, and rightfully so based on how the day went.

Bond markets began selling off on the simple release of Yellen's prepared remarks.  This was not often seen during Bernanke's tenure and definitely gave the impression that markets were anxiously waiting to hear from her.  After the initial bout of selling, things didn't deteriorate too much more.  This kept most lenders from repricing, but only because morning rate sheets captured a good amount of the initial drop in prices.  Both MBS and Treasuries are coasting out the door near their weakest levels of the day.

Keep in mind that MBS prices will drop some time after the close today as the "front month" MBS coupon shifts from February to March.  This drop usually runs between 8 and 12/32nds and does not affect reprice risk.

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
96-26 : -0-16
FNMA 3.5
101-07 : -0-15
FNMA 4.0
104-24 : -0-14
2 YR
0.3351 : +0.0241
10 YR
2.7259 : +0.0479
30 YR
3.6898 : +0.0258
Pricing as of 2/11/14 4:53PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
11:53AM  :  ALERT ISSUED: Negative Reprice Risk Increasing as MBS Hit New Lows
8:50AM  :  Yellen's Market Moving Speech
8:37AM  :  ALERT ISSUED: First Move is Weaker Following Release of Yellen's Prepared Remarks

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Sung Kim  :  "any Encompass/E-Disclosure users here doing electronic signature on FHA?"
Paul Philbin  :  "No we've been doing them since I started here in 2012"
Paul Philbin  :  "yes e-disclosures. We still require wet signatures on certain docs.. like 4506T etc.."
Sung Kim  :  "interesting Paul - wonder why FHA had to send out a ML if it was acceptable"
Paul Philbin  :  "I think that ML is geared more towards closing documents than upfront disclosures. for example the note...\"
Andy Pada, Jr.  :  "I hate to add more bureacracy, but we need a national housing policy. What is the federal government's role, if any, in the housing market?"
Ted Rood  :  "How about we just dismantle a few first before we create more?"
Justin Harward  :  "I would be very hard pressed to ever say more gov is the answer"
Matthew Graham  :  "Government guarantee seems to be worth more than anything private market participation can come up with"
Andy Pada, Jr.  :  "I think government involvement in the housing market is probably at its historical height. Are we okay with this platform? I am. "
Chris Kopec  :  "Seriously, without a government backstop, the mortgage market would be even more convoluted."
Chris Kopec  :  "Government should have a sub-prime GSE.....I've been saying that since 2007"
Ira Selwin  :  "they do"
Ira Selwin  :  "fha"
Matthew Graham  :  "I think the platform could be tweaked a bit. And that's probably what we'll end up with, as opposed to an outright death of Fannie/Freddie."