MBS RECAP: 9/19/2011


It’s getting to be about that time where reprices for the better should be coming in greater numbers. The day started off good for MBS and has just been exceedingly stable and positive throughout.

Fannie 4.0’s are up 16 ticks at 104-18
Fannie 3.5’s are up 22 ticks at 101-25

A few reprices for the better have already been reported and more may follow. Certainly, it seems that waiting until closer to lock cut-off could make sense on a day like today, but something about those MBS levels should look familiar.

Indeed those represent the “Concrete Ceiling mentioned in the MBS commentary on a few recent occasions. In short, if MBS are able to close more than a tick or two higher than current levels, it’d be the first time ever. With high risk events on the horizon and a decent amount of current positivity owing to fickle European headlines, holding out for incremental improvements in MBS is riskier at these levels than, say, Friday’s 104-00 levels. Just something to keep in mind if you see some rate sheet gains that look enticing.

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