MBS RECAP: Hungry Bond Rally Finds More to Eat

MLS listings of San Diego -

MBS RECAP: Hungry Bond Rally Finds More to Eat

Posted To: MBS Commentary

As Fannie 3.5 MBS pushed over 104 and 10yr yields moved down toward 2%, it became increasingly clear that the bond market rally required an ever-larger supply of motivation to continue rallying. When we actually lost ground yesterday despite the some fairly negative news around the world, it looked like we'd reached the near-term limit and were consequently set to trade cautiously heading into tomorrow Fed Announcement. But in the overnight session, global financial markets dropped off another huge meal for US bond markets. For the second day in a row , the Russian Ruble fell in value more than any other session in 16 years--the last time Russia defaulted. If anyone still cares about oil prices, they too trended lower. Stocks were much weaker out of the gate and comments from Germany's...(read more)

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RADIO WIRE - Issue Number Two - Now Available
Hello - Happy to have just completed the second issue of Radio Wire. Click to read. Many thanks and Enjoy, E.
Source: www.ep.tc

MBS Day Ahead: Confronting Another Major Inflection Point; Time to Bounce?

Posted To: MBS Commentary

The conventional wisdom regarding falling knives is to avoid trying to catch them. 2014's bond yields have been a quintessential example. At each major inflection point, investors have reached out to bet on rates moving back up only to find they reached too soon. The last occasion was after 10yr yields hit 2.34--certainly an important big-picture inflection point . Bond markets digested a mid-September FOMC Announcement without losing much ground. By that Friday, the lack absence of any material weakness in European markets made it clear that Treasuries were offsides. Domestic bond markets quickly fell back into line. To reiterate, from a technical perspective, the visit to 2.34 may have acted as a cue for a shift in positions. In any event, it's notable that positions became imbalanced...(read more)

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Mortgage Rates Back to Pre-Taper-Tantrum Levels

Posted To: Mortgage Rate Watch

Mortgage rates fell decisively today, bringing some lenders back in line with rate sheets seen on May 22nd, 2013. That's significant because it was arguably the first day of the 'Taper Tantrum,' when markets began pricing in the effects of a reduction in Fed asset purchases. On a more quantitative note, it was significant because it was one of the most abruptly negative days in modern mortgage rate history--one of several that would be seen in the ensuing months. Simply put, for more than a full year , borrowers and mortgage professionals would have been thrilled with the chance to go back in time to lock May 22nd, 2013 rates. In more than a few cases, now they can. The most prevalently-quoted conforming 30yr fixed rate for top tier borrowers is now in transit between 3.875% and 3.75% . 4.0...(read more)

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