MBS RECAP: OK Day for Treasuries; MBS, Not so Much

Negative reprice risk is now high for any lender that priced or repriced after 10am. The movement looks spiky on the surface but tradeflows in Treasuries have been linear, orderly, and showing a clear bias toward selling after short bets (betting on higher rates) were covered after ISM this morning.

So in other words, bond markets are getting back to their regularly scheduled programming. We’d expect to see support kick in before getting back to pre-ISM levels, but that still leaves plenty of room to fall. Fannie 3.0s are down 6 ticks now at 100-16 and 3.5s are down 4 at 103-18. 10’s are back to unchanged on the day at 2.1318.

Article source: http://www.mortgagenewsdaily.com/mortgage_rates/blog/311120.aspx

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