The morning and early afternoon hours were mildly disconcerting for bond markets as recent losses extended.  Even so, most of the losses were in before 9am.  That had the added benefit of insulating rates from most any reprice risk.  Finally, although we wouldn't realize it until the late afternoon, it also set us up for positive reprices as bonds came charging back late in the day.

The justification for the afternoon bounce is a complex and mysterious subject depending on how much certainty you want.  Now... it's not for nothing that I've spent the last two days discussing the implications of the holiday-inspired trading volume.  As recently as this morning I talked about it equating to the proverbial 'jury' being out.  In that sense, any seemingly confusing market movement could be as simple as the jury returning with their verdict.

For those that need more timely specifics, there are a few other candidates.  The most visible headline market mover concerned the White House power outage.  There were even a few wires that mentioned a "lockdown" and a "suspicious package," but they received passing glances at best.  Less visible, but more likely in play was the fact that corporate bond deals were pricing in droves today.  When that happens, it can create instant buying needs in Treasuries depending on how the deals were hedged during the issuance process.  On a final note, the fast-paced gains began after 2pm, which is the most active time of day for algorithmic and other short-term, opportunistic trading. 

Whatever the case, a day that had been red, ended green, and several lenders released positive reprices as the afternoon progressed.

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
102-14 : +0-01
FNMA 3.5
105-06 : +0-01
FNMA 4.0
106-30 : +0-01
2 YR
0.5200 : +0.0200
10 YR
1.8830 : -0.0160
30 YR
2.5180 : -0.0390
Pricing as of 4/7/15 3:56PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
11:01AM  :  ALERT ISSUED: On The Edge of Negative Reprice Risk (Emphasis on "Edge")
9:41AM  :  Significant Tradeflow Activity at CME Open; Bonds Weaker at First

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Scott Lushing  :  "better off raising the rate and giving a lender credit of 2% toward closing costs and they can use their own 2% to get down to 5% down. the MI is much better and less hit to the pricing"
Michael Dein  :  "It's a pretty stiff hit to the MI. If they can do 5% that's the way to go... "
Caroline Roy  :  "has anyone priced out MI for the 3% down agency program? pretty awful?"
Matthew Graham  :  "RTRS - U.S. 3-YEAR NOTES BID-TO-COVER RATIO 3.25, NON-COMP BIDS $62.36 MLN"
Matthew Graham  :  "3yr auction coming up. The expected yield (based on 'when-issued' trading levels) is 0.869 currently. 3yr auction yields have come in lower than expected the last 6 times. The average bid-to-cover has been consistently in the 3.33 area. Indirect bidding is less consistent, but averages just under 50% in 2015."
robert clark  :  "Of course solar city wants the phone number of the lender to explain that this is done all the time."
John Paul Mulchay  :  "Solar is causing all sorts of lending issues."
robert clark  :  "That's the thing. There is no $ amount on the lease."
Chip Harris  :  "So when someone does a solar lease through a company like Solar City, that affects their CLTV?"
Brandon Blue  :  "They will allow subordination"
robert clark  :  "On an streamline refi will FHA allow a solar lease that is recorded to be subordinated or does it have to be removed? This is for a non credit qualify with no appraisal."