MBS Live: MBS Afternoon Market Summary
If the PM hours were the only consideration for MBS markets today, it would have been as uneventful as Friday's super narrow session.  Even without the same level of containment, the trading day was still mostly drama-free during domestic hours.  This is due, in part, to any semblances of drama occurring right at the open or in overnight Treasury trading.  Bond markets sold-off just slightly as Asia and Europe went "risk-on" thanks to weekend headlines.  But technical support for domestic bond markets proved stronger (not to mention the fact that German Bunds began calling the "risk-on" bluff shortly after they opened) as 10yr yields held a ceiling around 1.733 overnight.  Even though the "risk-on" trade ultimately fared decently (based on a positive close for US Stocks), Treasuries never even thought about revisiting that 1.733 ceiling, rallying with MBS into 10:30am before leveling off for a flat slide through the afternoon in slightly positive territory.
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
104-08 : +0-03
FNMA 3.5
106-11 : +0-02
FNMA 4.0
106-31 : +0-00
FNMA 4.5
107-26 : +0-01
GNMA 3.0
106-02 : +0-07
GNMA 3.5
108-26 : +0-05
GNMA 4.0
109-20 : +0-01
GNMA 4.5
109-09 : +0-04
FHLMC 3.0
103-27 : +0-03
FHLMC 3.5
106-03 : +0-02
FHLMC 4.0
106-22 : +0-01
FHLMC 4.5
106-31 : -0-04
Pricing as of 4:03 PM EST
Afternoon Reprice Alerts and Updates
Below is a recap of instant Reprice Alerts and updates issued via email and text alert to MBS Live subscribers this afternoon.

1:57PM  :  Prior Weakness Ebbs, Small Bounce At Technical Support
After making a relatively convincing run weaker in price between 10am and Noon, MBS leveled off and held a tight sideways range around 104-07 in Fannie 3.0s--right in line with Friday's highs and a well-traveled inflection point of late. It held up as support in conjunction with 10yr yields finding similar technical support at 1.703 and both have improved since then (10's are down to 1.693 and Fannie 3.0s are up to 104-09).

These are small movements in the grand scheme of things and are even small in the context of today's trading range. The important thing, however, is that they stem the tide of whatever selling momentum was building into the afternoon. Even if they don't result in a bigger move to higher MBS prices, they help counteract what had previously been increasing negative reprice risk.
12:16PM  :  ALERT ISSUED: Continued Weakness After Hitting Highs, Reprice Risk Increases
Stocks and bonds bounced together at 10:37am, and in no unspecific terms. Since then, stock prices and bond yields have been rising fairly steadily and MBS prices have fallen from 104-11 to 104-07 in Fannie 3.0s. While this is still 2 ticks into positive territory on the day, it's also 4 ticks from the highs, and unfortunately for the reprice outlook, some lenders' initial rate sheets coincide with MBS price highs.

Merely being 4 ticks off those highs isn't cause for major concern, but the trend is troublesome. We have this broad, swooping move in multiple markets, and over a quarter of a point higher from the open in MBS, followed by a clearly defined bounce. This brings us to the leading edge of negative reprice risk for a very small subgroup of lenders.

The bigger reprice risk would come if the bounce continues. More lenders would be at risk of negative reprices below 104-06. We're teetering on the edge for now--still in positive territory and still probably in a situation where few, if any would pull the trigger just yet. But stay tuned! The past few bounces off 1.68 levels in 10yr Treasuries have seen 10's move up to at least the mid 1.71's, and such levels would probably coincide with another few ticks of weakness for MBS.
Live Chat Featured Comments
A recap of the featured comments from the MBS Live Dashboard's Live Chat feature, utilized by hundreds of industry professionals each day.

Ted Rood  :  "Q1, 2013 since I cleverly switched jobs with rates at all time lows in Nov 2012."
Andy Pada  :  "which was better for you guys Q4 2012 or Q1 2013?"
Rob Clark  :  "REPRICE: 1:17 PM - Provident Funding Worse"
Matt Hodges  :  "i closed a deal on Nov 3, with borrower starting 1/1/13 with post-close collection of pay stubs"
Matt Hodges  :  "that's a lender overlay, Tim"
Caroline Roy  :  "typically 30 days in my experience"
Tim Mitchell  :  "here's another one, I know different investers have overlays for this, but what are the fannie requirements when someone starts a new job, do you have to have one paycheck, proof that he started or do you have to wait 30 days?"
Ryan Kelly  :  "TM, yes for chapter 7, 2 years for chapter 13"
Tim Mitchell  :  "My client discharged a BK, wants to buy conventional at 5% down, is the fannie waiting period 4 years from discharge?"
Ryan Kelly  :  "MH, I thought it was 0x30 in the last 12 months for HARP"
Matt Hodges  :  "Anyone know if Freddie's Open Access allows 1 x 30 mortgage in the last year? thinking they allow it 7-12 months ago, but not most recent 6"
Tom Schwab  :  "He has to move rapidly. He is 87 years old."
Matthew Graham  :  "RTRS- ITALY PRESIDENT NAPOLITANO SAYS WILL BEGIN RAPID SERIES OF MEETINGS ON TUESDAY ON FORMING NEW GOVERNMENT"
Matt Hodges  :  "correct"
Brent Borcherding  :  "So, it's a combined calculation? I did the .14 calculation but wasn't sure if it included both."
Matt Hodges  :  "Brent, the VA calculates maintenance & utilities at $.14 per sq ft"
Brent Borcherding  :  "For VA Loan Analysis, do you need to add cost for maintenance of just for utilities? "
Ray J  :  "maybe Provident wants loans in the 3.0 stack"
Bryce Schetselaar  :  "I looks to me like that is the case at 3.75%, at 3.5%, Provident pulls back ahead"
Scott Valins  :  "Interbank for one"
Ray J  :  "Compared to whom?"
Scott Valins  :  "anyone notice that Provident's HB pricing isn't great?"
Jeff Anderson  :  "REPRICE: 12:17 PM - Chase Better"
Christopher Stevens  :  "REPRICE: 11:34 AM - Wells Fargo Better"
Matthew Graham  :  "RTRS- ITALY PRESIDENT NAPOLITANO SAYS SAYS SAW "DRAMATIC ALARM" IN POLITICAL DEADLOCK WHICH MEANT HE COULDN'T DECLINE APPEALS FOR SECOND MANDATE "

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