Ukraine-related headlines sent moderate shockwaves through markets overnight, pushing Treasury yields higher by the open. Since then, the negative momentum has continued in the absence substantive economic data. In short, Ukraine is today's only trade and we're seeing a correction to several days spent moving in the same direction.
Losses are approaching 3/8ths of a point in MBS and 0.07% in 10yr yields. Earlier-pricing lenders face the most reprice risk because most of the weakness since the open has been since since 9:40am. We're now on the verge of later pricing lenders considering reprices as well. That said, bond markets are also showing some signs that they're considering leveling-off into the afternoon, or at least slowing the pace of weakness.
MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing
is available via MBS Live.
| MBS || |
96-31 : -0-16
101-07 : -0-14
104-23 : -0-11
| Treasuries || |
0.3290 : +0.0200
2.6743 : +0.0663
3.6181 : +0.0601
| Pricing as of 3/4/14 12:41PMEST |
Morning Reprice Alerts and Updates
12:20PM : ALERT ISSUED: Selling Pressure Persists; Negative Reprice Risk Remains
10:03AM : ALERT ISSUED: Negative Reprice Risk Increasing As Bond Markets Swoon
9:46AM : ALERT ISSUED: MBS Hit Session Lows; Reprice Risk is Low but not Absent
9:13AM : Vladimir Putin's Morning Market Call (Not Bad!)
Live Chat Featured Comments
Christopher Stevens : "As VB and I were discussing yesterday this flight to safety based in tensions in Ukraine could be short lived and could change overnight. Based on the 10YR making a rapid move to 2.65 at 2am it looks like the flight to safety has currently been grounded. "
John Tassios : "Yes CS, looks like it is hard to break below 2.60 10 Yr, the 2.58 to 2.60 is huge resistance area to break through"
Hugh W. Page : "A break out to the upside through resistance on this Triangle formation that has formed during the last 6 mos on the FNMA 4.0 would be quite positive."
Stephen Mitroka : "Any one know why we are seeing the FNMA 4.0 kick off action well below yesterday's close?"
Victor Burek : "seems tensions are easing in Ukraine"
Matthew Graham : "biggest source of overnight market movement was the following news: RTRS - RUSSIAN PRESIDENT PUTIN ORDERS TROOPS ENGAGED IN MILITARY EXERCISES TO RETURN TO THEIR BASES - AGENCIES CITE KREMLIN SPOKESMAN"
Stephen Mitroka : "Thanks MG. It seems one force bigger than the institutional investor is the Geo Political Risk. Amazing how history holds true"
Matthew Graham : "It can be, but keep in mind the charts in the 'day ahead.' Although bond markets will certainly follow the direction suggested by geopolitical tension, it won't necessarily be at the same pace as market sectors closer to ground zero. Markets also sometimes use such events as a convenient excuse to do something they already might have done. "
Christopher Stevens : "Seems like just another well planned chess move to me. Take my pawn while I maneuver my other pieces into better position to take your king. Putin is a patient man and considers his presidency to be a lifetime appointment."
Christopher Stevens : "Or as you say MG is the market using the troop pullback as a convenient excuse to do something they already might have done which is to get back to the middle ground of 2.70 we have hovered around before employment numbers are released."
Matthew Graham : "I think that's the highest probability conclusion "
Victor Burek : "hindsight, yesterday was day to lock, but pricing isn't much worse this morning"