Compared to the 9 ticks of price weakness in 10yr Treasuries (+3.1 bps), Fannie 3.5 MBS were only off 5 ticks and Fannie 4.0s just 3 ticks in the final hour of trading. The day began on a sour note for bond markets as overnight weakness was met with just a bit more domestic-session weakness.
In the absence of any actionable headlines or economic events, bond markets instead continued the correction off the lower end of the yield range that began at the end of last week. A surge in equities was fairly detached on a moment-to-moment basis, but was consistent with the 2-day theme (in other words, stock prices and bond yields weren't glued to each other throughout today's session, but have otherwise generally moved together since Friday morning.
Corporate bond hedging (where large companies issuing debt will take a short position in Treasuries in order to lock-in their rate of return--often based on Treasury yields plus a margin--between the time the deal is announced and subscribed) was likely also a drag on Treasuries as several big deals were brought to market. This isn't uncommon when Treasury yields began rising from recent lows, and also helps explain why Treasuries were incrementally weaker than MBS today.
MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing
is available via MBS Live.
| MBS || |
97-16 : -0-07
101-22 : -0-05
104-25 : -0-04
| Treasuries || |
0.3990 : +0.0160
2.6557 : +0.0327
3.4907 : +0.0247
| Pricing as of 5/12/14 4:24PMEST |
Today's Reprice Alerts and Updates
3:03PM : Sideways to Slightly Stronger--Outperforming Treasuries
10:26AM : Quick, Small Jump to Weakest Levels; Not Enough For Significant Reprice Risk
9:12AM : Mostly Holding Ground After Extending Overnight Weakness
MBS Live Chat Highlights
William McGuirt : "cash out refi after home is taken off the market. max LTV?"
Ted Rood : "I just lost a cash out because it had been listed, we have to wait until 180 days after the listing was pulled . It was a VA though."
dustin mcalister : "if someone purchases a home for cash at an auction and then wants to finance it is that a purchase or refinance? "
Matt Hodges : "they had cash? refi"
dustin mcalister : "going by purchase price on value though right, not what it appraises for;"
Clayton Sandy : "correct. It would be under delayed financing"
Tim Robinson : "Dustin, Purchase price within 6 months of HUD close date subject to R/T refi guides and pricing "