MBS RECAP: 2nd Friday In A Row With All-Time Highs

Today has seen the first directional breakout of a week’s worth of narrow ranges. From trough to peak, Fannie 3.0s are up almost half a point on the day whereas previous days have seen ranges closer to a quarter of a point.

In terms of price levels, that’s 11 ticks better on the day to 105-02–10 ticks higher than the previous all time highs. 10yr yields bounced supportively at 1.79 for the second time this week. Although volume has been relatively low all week, both these 1.79 ceiling bounces have gotten the best of it.

As we mentioned earlier, MBS likes it when the wide wide world of interest rates provides a predictable playing field. By continuing to hold that 1.79 level (there are other baseline indicators as well, but we stick with 10’s for the sake of simplicity and continuity), 10’s continue to NOT give MBS a reason to fear a sell-off of sufficient size to threaten lower coupon liquidity.

Several lenders have already repriced positively and more can certainly follow, though we’d remind you to keep an eye out for the “pipeline control” reprices that some lenders are known for.

Article source: http://www.mortgagenewsdaily.com/mortgage_rates/blog/275635.aspx

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