At face value, today was great! Bonds overlooked all of the morning’s economic data (no surprise) and made modest gains that were subsequently held throughout the session. There was very little volatility. The ground-holding came despite gains in stocks. And multiple lenders repriced positively.
Indeed, all of the above is “good!” The issue is that all of that ground-holding occurred in the thick of yesterday afternoon’s range and yesterday afternoon was the worst afternoon for bond market in more than 4 years! Even more disconcerting is the fact that yields ran into resistance today at a floor around 2.88% which was an important ceiling over the past two weeks. It was only meaningfully broken yesterday, so to return to the scene of that crime and use 2.88% as a floor is not good from a technical standpoint.
All this to say that the same old trend continues to be the same old trend. Sure, we didn’t get a huge wave of new selling pressure today. Sure, we actually spent most of the day in positive territory. But these modestly positive days are simply going to happen even if the broader, negative trend continues taking rates higher overall.
MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
99-16 : +0-03
2.9058 : -0.0072
|Pricing as of 2/15/18 4:13PMEST|
Today’s Reprice Alerts and Updates
8:47AM : ALERT ISSUED: Little-Changed After Glut of Inconsequential Data
MBS Live Chat Highlights
scott weinstein : “and this is considered a good day”
Dan Draitser : “Still at 2.9? Thought seeing all these price changes we’d be below”
Matthew Graham : “checking recent issuance in Eikon and there’s a good case to be made for 4.0s as well. I might still watch 3.5s for reprice risk (they’re still relevant and will be more sensitive), but 4.0s have gotten the nod on several big pools so far in Feb where the average rates are closer to 4.5%”
Matthew Graham : “4.0s are more relevant for a 4.5% ginnie rate than a 4.5% fannie rate. I’m not sure if it’s time to switch just yet, but I’ll do some research on it. It’s much easier to tell when it comes to Fannie/Freddie”
Christopher Max NMLS #8705 : “Should I be looking at GNMA 3.5 Coupon for rates at 4-4.50%?”