Newswires are still hitting, and while there’s no thunderous rally underway for MBS, details emerging regarding today’s closed door meeting between the President and Congressional leaders have helped. So far, the news is underwhelming, which sent stocks to their lows of the day and helped bond markets reinforce the ground they’d already been holding.
MBS rose a few ticks as stocks sank, bu from a bond market standpoint, the reaction is more readily seen in the 1bp move lower in 10yr yields. Again, newswires are still streaming in and we may not have seen the end of this end-of-week reaction, but so far, it’s looking to be positive for bond markets.
For all but the most sadistic lenders, this effectively shuts off any preexisting negative reprice bias. Positive reprice potential, however, is limited, apart from the sort of “stability” reprice” that a few lenders occasionally offer. Bottom line: positive shift in reprice risk, which at the very least, gets us back to neutrality–perhaps even better.