The S&P, Dow, and NASDAQ have all opened to the upside. As stocks futures ticked higher this morning, the long end of the yield curve (TSYs) began to show weakness and yields are moving higher. Currently the 10 yr TSY note yield is trading over 3.55 support...testing 3.60.
Consequently, FN 4.5 current coupon MBS prices have fallen 8/32 to an intraday price low of 100-01. Although we would expect to see 100-00 support hold, if TSYs continue to sell off we cannot rule out a drop below 100-00.
Unfortunately this is bad timing, as many lenders are currently generating daily rate sheets and this move lower in price is likely to force secondary to add in a few extra bps of margin...pushing mortgage rates slightly higher.
HOPEFUL SIGN: WATCHING FOR BARGAIN BUYING
For an explanation of why this is happening READ THIS. Its a trader's world, we're just living in it...plus TSY supply announcement is at 11AM
PS...when I added charts, the 10 yr had spiked over 3.60 and MBS prices fell below 100-00....3.60/3.61 support holding now, MBS offer stabilizing but rates market still volatile...dont get comfy
MBS Market Alerts
