Several reports now of lenders repricing for the better in the Live Chat section of the MBS Live Dashboard. The two traditionally early-to-reprice lenders are now being joined by others as MBS have not only been holding their gains, but have done so in incredibly stable fashion, hugging an important intermediate trendline. Here’s a clip from the Dashboard showing the long term resistance that’s been guiding the MBS rally so far today as well as the Live Pricing table for a quick look at current levels.
(NOTE: the prices and chart seen below update in real time throughout
the day as well as the custom analysis on the chart. These are just
two of the windows on the MBS Live Dashboard. To learn more about the
other features or start a risk-free trial, click here…)
Learn more about MBS Live!
Here’s what the long term support and resistance lines look like in the bigger picture. The trend channel has been quite consistent, with only one violation on the failed break lower following the EU-Summit sell-off:
Treasuries are in something of a similar trend pattern, although trendlines in the 10yr Note are more likely CONVERGING as opposed to moving in parallel like MBS seen above. We took this chart back a bit further in order to show the 2 major “flight to safety” rallies that allowed MBS prices to get to such heady levels. Absent that sort of panic (panic that was driving demand for fixed-income US debt), MBS are essentially at the very best end of their recent range. That’s why we think 3.5’s are grinding against the upper trendline with such regularity today. “Something Else” needs to happen to shift these trends. Between the FOMC Announcement, Bernanke Press Conference, and NFP this week, it’s likely that 10yr yields will be moving outside one of the yellow lines seen below by the end of this week. The direction of that breakout should roughly coincide with Fannie 3.5 MBS being able to break out of their trend channel.