MBS RECAP: Yesterday’s Losses Recovered; FOMC Minutes and Data Ahead


We’re in that magical in-between territory for MBS movement where positive and negative points of view are perfectly deadlocked. For now, the MBS are 4 ticks lower from their previous highs BUT only 2 ticks lower than rate sheet print time levels. 10yr yields have approached their weaker levels of the day but continue to find support before breaking above 2.84. On a final note, some of the weakness in Fannie 4.0s is being redirected to Fannie 3.5s as buying demand.

All the above having been said, this is simply a heads-up that MBS and Treasuries are “hanging out” at their weaker levels of the day, and while reprice risk can’t ever be ruled out altogether, we’re not seeing anything to suggest it currently.

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