MBS RECAP: Unsurprisingly Ending The Week at Average Price


If the lenders you deal with haven’t been obviously cautious in their morning rate sheets then you probably should be as we head into the afternoon. We’re right on the edge of the weakest levels of the day and it wouldn’t take more than a tick or two of further weakness to noticeably increase negative reprice risk.

As it stands, we’re probably already right on the edge of reprice risk, but that would depend heavily on the lender. Fannie 3.5s are down 9 ticks at 101-23. Risk becomes moderate between here and 101-20, and more serious if we move below that. Still holding for now, but only just.

10’s are pushing up against a ceiling at 2.652, which they just broke for the first time in over an hour (by moving up to 2.654). Of course we’ve already discussed not reading too much in to this afternoon’s movement, but in terms of negative reprice risk, this is the point at which we’re going from “not concerned” to “possibly concerned.”

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