MBS RECAP: 3/1/2012


excerpt from the most recent MBS Commentary post:

MBS continue to trade in the red into the afternoon basically in the same range as this morning. Despite the jump lower in prices today, we’re still trading yesterday’s events and momentum, while today’s economic data and events, if anything, have served to reinforce the technical support levels that we already stood a good chance of seeing.

The technical landscape has definitely been fascinating, if not somewhat boring and dare we say, predictable?! Granted, relatively big losses in MBS are never boring in terms of the damage done to rate sheets, but Fannie 3.5’s continue to trade over 103-00! If the big picture is of any consolation to you, that’s about a point higher than 2010’s best levels. The 103-00 level was also the next logically supportive pivot point after breaking 103-10 at the open.

Bottom line: down, but not out. This week is pretty much over if volume is any indication. Next week’s NFP as well as the expiration for Greece’s private sector bond swaps will very likely cast the deciding votes in the various battles outlined in the following commentary:

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