MBS MID-DAY: Reprice Risk Mostly Dry as Bonds Cope with Post-Data Weakness

By Matthew Graham

Posted To: MBS Commentary

The day began on a strong note with US bond markets led higher in price by an even stronger overnight move in Germany. Following the mornings’ economic data, MBS and Treasuries fell back into just slightly negative territory. The last update on MBS Live noted that reprice risk had dried up. That’s still true as we head toward the noon hour, but only “mostly” true (in the same way Prince Westley was only “mostly dead” in the Princess Bride). Fannie 3.0s are down 2 on the day with some lenders looking at 3/32nds of weakness since morning rate sheet print times. This is NOT typically sufficient for a negative reprice, but it’s close. As of right now, 10yr yields are putting in their second bounce at 1.996 highs. That’s positive, as long as it holds (they didn’t…(read more)

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