Last week saw a reigniting of geopolitical risk on Thursday after headlines suggested the Crimean referendum as a potential powder keg over the weekend.  That led to a strong 1-day rally for bond markets, followed by a relatively more flat (but still slightly weaker) day on Friday.

That weakness may have been a warning sign that bonds had priced in as much geopolitical risk as they were willing to price in.  Today's ongoing move back toward weaker levels corroborates that.  Between the two days, Treasuries are a bit more than half way back to Thursday morning levels, and MBS are even closer.

At issue is the fact that there has been no immediately traumatic fall-out from Crimea's nearly unanimous vote to join Russia.  Whereas Secretary of State Kerry spoke of a "series series of steps" that would be taken by the EU and US if the referendum proceeded, so far that's merely amounted to "sanctions"--which don't quite ring the same alarm bells as military action.

The farther away the market moves from worrying about military escalation, the more of Thursday's rally we're likely to pay back.  The caveat is that the rest of the week should offer other reasons to move money with a more robust data calendar in general, and an FOMC Announcement on Wednesday.  Additionally, we're still not at a point where we can say the Ukraine situation is blowing over, but for now, that's the direction we've moved since Thursday.

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
96-18 : -0-11
FNMA 3.5
100-25 : -0-09
FNMA 4.0
104-07 : -0-06
2 YR
0.3626 : +0.0206
10 YR
2.6921 : +0.0471
30 YR
3.6300 : +0.0430
Pricing as of 3/17/14 4:15PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
2:38PM  :  ALERT ISSUED: Negative Reprice Risk is Now Official
2:06PM  :  ALERT ISSUED: Pushing Weakest Levels; Negative Reprice Risk Looming
9:45AM  :  Moving Back Toward Lows After Industrial Production Data; Stronger Stock Open
9:12AM  :  Bond Markets Weaker Overnight, but Recovering Into Domestic Session

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
joon choi  :  "what does the us care if crimea join russia?"
Matt Hodges  :  "oil/gas prices"
Matt Hodges  :  "domino effect on rest of E Europe"
Dave Pressel  :  "does anyone know the # of the mortgage letter from HUD that shows FHA Streams are not included in the Compare Ratio?"
Ira Selwin  :  ""