MBS RECAP: 1/10/2012

This isn’t a full-blown “negative reprice alert,” but there’s enough of a deviation from earlier MBS activity to put the word out. 103-02 in Fannie 3.5’s has seen some action as pivot point over the past few sessions, capping prices in the first hour of trading and then taking on a generally supportive role into the afternoon. It had been no different today, but we just saw our first tick down to 103-01.

10yr yields have bounced moderately higher off mid 1.95’s up a scant bp and a half to 1.970, MBS have regained 103-02. If things get no worse from these levels, reprice risk would stay relatively low, but if things deteriorate further, some of the characteristically early reprice crowd could consider recalling sheets for the worse.

Again, this is an early warning, more for purposes of attention and vigilance than to predict a change.

Article source: http://www.mortgagenewsdaily.com/mortgage_rates/blog/242680.aspx

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