MBS RECAP: Record High MBS Prices, Record Low Rates. What Next?

Bonds and rates clearly aren’t looking at economic data as a key source of motivation, nor are they playing by the normal set of rules.  Coronavirus has rewritten those rules.  How long can this all-time-low rate environment last and how do we approach it from a lock/float standpoint?

Market Movement Recap

08:13 AM

Bonds generally improved in the overnight session as stocks lost ground.  10yr yields were as low as .661, but are now back up to .671 in quiet trading.  MBS are roughly unchanged to start.

10:02 AM

Initial strength in bonds remains, but MBS are outperforming.  Last night’s prepayment speed report could have something to do with that.  UMBS 2.0 coupons are up 6 ticks (.19).  10yr yields down half a bp at .674

01:17 PM

Treasuries have caught up to MBS a bit in terms of day-over-day performance.  Very decent 3yr auction.  10yr yields now down 2bps to .658.  UMBS 2.0 coupons up a quarter point.  

04:24 PM

Bonds surged into the close as stocks ultimately swooned (S&P futures down more than 1%).  10yr yields down more than 4bps at .635.  UMBS 2.0 up 31bps (10 ticks). 


MBS Pricing Snapshot

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

MBS

UMBS 2.0

102-27 : +0-10

Treasuries

10 YR

0.6350 : -0.0490

Pricing as of 7/7/20 4:26PMEST

Today’s Reprice Alerts and Updates

3:27PM  :  Bonds Rally Even More, But May Be Cooling Off

12:06PM  :  MBS Up a Quarter Point, Outperforming Treasuries

8:26AM  :  Bonds Slightly Stronger To Start


MBS Live Chat Highlights

Matthew Graham  :  “FED’S CLARIDA SAYS FED CAN DO MORE, WILL DO MORE IF NEEDED :CNN INTERNATIONAL INTERVIEW”

Matthew Graham  :  “FED’S CLARIDA SAYS THERE IS NO LIMIT ON HOW MUCH MBS, TREASURIES THE FED CAN BUY”


Economic Calendar

Time Event Period Actual Forecast Prior
Tuesday, Jul 07
11:30 26-Week Bill Auction (bl) 35
Wednesday, Jul 08
7:00 MBA Purchase Index w/e 308.7
7:00 Mortgage Refinance Index w/e 3359.2
13:00 10-yr Note Auction (bl)* 29

By Matthew Graham , dated 2020-07-07 16:28:45

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Courtesy of Mortgage News Daily

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