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MBS RECAP: Sideways to Start The Week, But That's Still a Victory
Jun 7 2021, 4:25PM

Last Friday's jobs report sparked a reasonably big bond rally.  In terms of 10yr yields it was one of the best days in weeks, if not months (depending on whether we're measuring from the previous close or the opening trade of any given day).  This created a risk that traders would seize the gains as a sort of selling opportunity--especially with yields bouncing almost perfectly at the 1.56% technical level.  While we did see a bit of weakness today, it was almost too small to count.  That's a victory considering Friday's gains, but volume and volatility were so low that we arguably haven't seen a representative sample of traders show up for the week.

Econ Data / Events
Market Movement Recap
09:04 AM

Modestly weaker at the start of overnight trading.  Flat in Asia and a small amount of additional selling in Europe.  10yr up 2bps at 1.576 and 2.0 UMBS down an eighth, trading just under 101.00.

01:22 PM

Sideways to slightly stronger with no drama for the past several hours.  2.0 UMBS are now down only 2 ticks (.06) and 10yr yields are up 1.2bps at 1.57%.  

04:16 PM

Slow and steady gains for MBS, now flirting with 'unchanged' levels in after hours trading.  Treasuries hit the 3pm close roughly 1bp higher, which is a strong enough showing considering Friday's solid gains.  Light volume and volatility all day.

MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
UMBS 2.5
103-18 : -0-01
10 YR
1.5720 : +0.0120
Pricing as of 6/7/21 4:25PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
9:20AM  :  Slightly Weaker, But Mostly Sideways

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Ira Selwin  :  "The 7% limit is what Fannie/Freddie are allowed to acquire (52 month rolling). Based on those numbers, they dictate the numbers that sellers are allowed to sell them based on UPB. Obviously if their overall 2nd/noo business is increasing, then they need to adjust as such below. As their rolling numbers change, the percentage they allow sellers will change"
Brian Laitsch  :  "So how will these new cap of 6% impact things? I guess I am having a hard time understanding the differences between an aggregate based on UPB vs total acquisitions. In my simple mind these numbers should be very similar, so that being said, 6% would have a big impact, no?"
Pedro Lopez  :  "Post July, cannot exceed 6%."
Pedro Lopez  :  "July cannot exceed 6.5%"
Aslam Mansoor  :  "This new policy will help us manage to the acquisition limit that the amended and restated Senior Preferred Stock Purchase Agreement (PSPA) has placed on Freddie Mac. The amended PSPA requires us to limit our purchases of mortgages secured by second homes and/or investment properties to 7% of our total purchases. This is measured by funded UPB on a rolling basis using the prior 52-week period."
Aslam Mansoor  :  "Guide Bulletin 2021-21: New Cap for Second Home and Investment Properties Mortgages In Single-Family Seller/Servicer Guide (Guide) Bulletin 2021-21 we are announcing a cap structure on the sale of mortgages secured by second homes and/or investment properties. For Sellers that sell more than five loans secured by second homes and/or investment properties, such loans may not be more than 6.5% of total monthly unpaid principal balance (UPB) for July sales and thereafter not more than 6%."

Economic Calendar
Time Event Period Actual Forecast Prior
Monday, Jun 07
15:00 Consumer credit (bl) Apr +18.61 21.00 18.61
Tuesday, Jun 08
8:30 International trade mm $ (bl) Apr -69.0 -74.4
13:00 3-Yr Note Auction (bl) 58

About the Author

Chief Operating Officer, Mortgage News Daily / MBS Live
A former originator, Matthew began writing for Mortgage News Daily in 2007, covering a wide range of topics. Seeing a need in the marketplace, his focus increasingly shifted toward relating MBS and broader financial markets for loan originators. ... more

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More From MND

Mortgage Rates:
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  • 15 Yr FRM 2.45%
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  • Jumbo 30 Year Fixed 3.09%
MBS Prices:
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  • 30YR FNMA 5.0 109-24 (-0-01)
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Recent Housing Data:
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  • Purchase Index 1.82%