To be clear, at least one positive reprice has already come across, and the possibility lingers as MBS continue to trade a narrow range at their highs of the day. All that having been said, those highs aren’t even an eighth of a point higher than the levels that prevailed during most lenders’ rate sheet print times. That means we’re limited to a small subset of lenders who tend to offer “stability reprices.”
Although those types of reprices aren’t necessarily the kind of thing we’d hold our breath for, neither is the market selling off or even displaying any tendency toward weakness at the moment. That said, it’s not displaying a tendency toward much at all! Prices have moved maybe 1 tick in either direction since before noon–10yr Treasuries, less than .5bps in either direction over the same time.
Meanwhile, stocks are falling, but haven’t dipped below Thursday’s levels. That’s something that 10yr yields are only dreaming of at the moment. Bottom line, there’s a sense that markets are holding their collective breath, waiting for the other shoe to drop.
On the positive side, at least we’re in the green. On the negative side, MBS have stopped making gains (which was laid out as a possible 2-day trend after fresh 2-day highs this morning) and instead have been bumping their head into a 104-09 ceiling in Fannie 3.0s. Same story with 10yr yields, but “floor” instead of “ceiling.” 10’s version of resistance is roughly 1.89.