MBS RECAP: 12/29/2011

Several lenders have repriced for the better after Fannie 3.5’s hit their highest levels since the first few days of October. There’s no ground-breaking fundamental data driving a rally either in MBS markets or Treasuries. Volume is almost entirely absent, though not quite as absent as Tuesday.

It’s really really really quiet out there with even the big move on the chart in 10yrs. Given current volumes, it wouldn’t take much to spark such a movement. The following MBS Commentary post has a nifty chart showing a 3 month trend in 10yr yields as well as how futures volume compares over that time. Beyond that, the technical analysis of the longer term trendline in Fannie 3.5’s as well as support from the 80 day moving average might interest some of you, and any fans of the movie “Princess Bride” might also appreciate some of the analysis…

On a final note, as the day winds down and the prospect of an early close looms tomorrow, if you’re seeing certain lenders reprice to relatively aggressive levels, and assuming said lender has been predisposed in the past to release “pipeline control” reprices for the worse, one might also keep that in the back of their minds, although tempered by the realization that less business is likely being done at this particular juncture on the calendar. Trust your instincts… Use the force, etc…

Article source: http://www.mortgagenewsdaily.com/mortgage_rates/blog/241426.aspx

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