MBS RECAP: 2/24/2012


One of those “early warning” alerts that may or may not materialize… A “heads up” if you will…

Fannie 3.5’s are grinding against their lows of the day for no particular reason other than the normal sorts of gyrations that can be seen at the 3pm Treasury close. That brings them to 103-12 at the moment whereas 103-13 had been the supportive line for today. Treasuries haven’t made any especially alarming moves although 10’s moved up from 1.97 to 1.98+ fairly quickly in the few minutes before and after 3pm.

Bring 6 ticks down from the highs of the day, and having held the lows of the day for several minutes now, risk factors are starting to increase that a few of the early-to-act type lenders could be considering a small reprice for the worse. Losses aren’t at the point where this is necessarily a sure thing, but continued time here or continued losses would make that more likely. A solid bounce back to 103-14 higher in the next few minutes would make that less likely.

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