Departure of European Guests Has Bonds Feeling Blue (or Red)

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MBS Live folks don’t need to be reminded that red is not our favorite color.  It connotes bond market losses on the MBS Live dashboard (and losses in general, of course).  We saw plenty of it today despite the absence of any meaningful news, econ data, or other developments that would typically prompt such a selling spree.

What gives?  In this case, it’s pretty simple and fairly well foreseen in my analysis last week.  Specifically, I said we’d need a fresh supply of European drama (or other equivalent market mover) in order to merely maintain the gains we’d already seen, let alone improve upon them.  

Instead, we’ve seen the European drama dry up, for the most part.  If Treasuries had been having a great time partying with their European friends, it increasingly looks like party time is over.  After hoping to hold under the 2.915% “gap” from the beginning of last week, 10yr yields are quickly up to 2.94%+.  Any further weakness tomorrow will confirm rates’ reentry into the weaker range from 2.95%-3.10%.


MBS Pricing Snapshot

Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.

MBS

FNMA 4.0

101-23 : -0-07

Treasuries

10 YR

2.9442 : +0.0492

Pricing as of 6/4/18 5:28PMEST

Today’s Reprice Alerts and Updates

2:03PM  :  ALERT ISSUED: Negative Reprice Risk Increasing

12:48PM  :  ALERT ISSUED: Weakest Levels–Slowly… Reprice Risk on Horizon


MBS Live Chat Highlights

Ira Selwin  :  “Separately, they have a 97% LTV program (just like Fannie Mae has)”

Jason Anker  :  “but with the lower limits they also added a 3% option with no income limit and 35% coverage.”

Dan Shapiro  :  “Were income limits removed from Home Possible??”

Ted Rood  :  “”Dear borrower, thanks for your sales contract today showing closing on June 19th. Had you forwarded the contract when it was accepted May 22nd, that closing date would have worked. Since you waited 13 days to send it, however, you’ll need to do an extension.””




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