MBS RECAP: Uneventful Day Leaves Bond Markets Fairly Flat; MBS Underperform

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As the last few trades of the day trickle in, MBS are set to close almost perfectly in line with yesterday's closing levels.  Even before that, there hasn't been much movement to speak of. 

The hand-off from European trading was slightly negative this morning, but both MBS and Treasuries stayed inside yesterday's weakest levels.  Producer Prices came in "healthy," and while some credited that data for additional weakness in the morning, I'm not seeing it.  Bonds were already on an upswing and we're talking about 2.560 to 2.567 in 10yr yields.

It's a bit easier to make a case for weaker Industrial Production at 9:15am as a modest benefot to bond markets.  More than anything though, slumping stocks and 'asset allocation' flows (money managers selling stocks to buy bonds) helped keep the range contained for MBS.

Despite the contained range, however, MBS struggled a bit compared to Treasuries.  10yr yields are near their best 2-day levels while MBS are roughly in the middle of theirs.  That underperformance has been a fairly consistent theme for nearly 2 weeks now.

Yellen's second day of congressional testimony provided nothing more than a few good laughs.  There were no noticeable market reactions.  The calendar provides a bit more to go on tomorrow with Jobless Claims, Housing Starts, and Philly Fed.

Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live. Pricing as of 7/16/14 4:42PMEST Today's Reprice Alerts and Updates 11:10AM  :  Back to Unchanged Levels as Stocks Slide 9:05AM  :  Bond Markets Slightly Weaker After Neutral Overnight Session Nathan Miller  :  "thx rob, it is, do you know their down pmt requirement on a purch off hand?" robert clark  :  "NMSI if the loan amount is higher than $417,000" Nathan Miller  :  "outside of the hard money lenders, anyone know a stated income lender for a deal in CA? self emp brwr." William Hansen  :  "10 yr Green 3.5 FNMA Red. Hopefully FNMA turns. " Discuss the MBS and Mortgage Markets on Our Streaming Dashboard

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MBS RECAP: As Initial Headline Shock Fades, Bonds Level-Off

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The amount of geopolitical turmoil in the world today is not materially better than yesterday, but without new surprises to fuel safe-haven demand, bond markets found no reason to extend the rally.  That said, if the rally was somehow overdone or made stronger by something like 'snowball buying,' we would know it today.  The fact that there wasn't a more pronounced pull-back is a testament to the gravity of the situation and the real presence of safe-haven demand yesterday.

MBS started the day about 3/32nds weaker and are now heading out in roughly the same territory.  The weakness was more severe heading into the noon hour, but 10 yields had a firm bounce at 2.50%, which marked the end of selling momentum in bond markets for today.

Weekends can always bring significant developments when it comes to geopolitical market movers.  More often than not, if US bond markets have rallied on geopolitical risk heading into the weekend, they move in the opposite direction the following week.  As far as how that plays out this time, volatility is potentially higher than normal considering a relative lack of calendar events in the week ahead.  That may leave markets even more sensitive to headlines as there's not much else going on.

The week after that is the polar opposite, with the first look at Q2 GDP, an FOMC Announcement, and NFP on Friday.  It may well set the tone for the next major move.

Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live. Pricing as of 7/18/14 4:01PMEST Today's Reprice Alerts and Updates 1:10PM  :  Sell-Off Subsides For Now; Slightly Diminishing Reprice Risk 12:28PM  :  ALERT ISSUED: Negative Reprices Increasingly Possible 11:21AM  :  ALERT ISSUED: On Shaky Ground; Negative Reprice Risk Looming 9:03AM  :  Bond Markets Weaker Overnight; Bouncing Back Into Domestic Session sklodzin  :  "Hey all, do any of you know of a specific rule that dictates the need to separate non married coborrowers on 1003's?" Josh Olson  :  "UW question: Condo purchase, Conv financing, 80% LTV, 808 credit, 183 units BUT 30% owned by investment group. Who will finance this loan?" Joseph Moran  :  "first rate sheet of the day. basically no change" Dan Clifton  :  "josh that should be fairly easy. at 80% you need a full review which is appraisal, condo questionnaire, budget, condo docs insurance, the max number of investment units is 49% on conventional for exisiting complexes" Brent Borcherding  :  "JO, is there a specified reason the group owns the 30%. We have an investment condo in Chicago that the builder was required to keep 30% for rentals in a redeveloping neighborhood, it was part of the agreement with the city. Fannie approves the condos, on a case by case basis, if documented." Josh Olson  :  "DC: Fannie Mae MRI guide states no more than 10%" Oliver Orlicki  :  "mg, we on the 3.5 or 4?" Alan Craft  :  "3.5 most relevant right now" Matthew Graham  :  "yes. 4.0 is relevant, but 3.5 certainly more relevant to reprice risk." Discuss the MBS and Mortgage Markets on Our Streaming Dashboard

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MBS RECAP: With nothing better to do, obligations to follow Stocks and securities

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If you have not already heard (say, like 7 or 8 times of us - both until after the fact), calendar of today was light enough for bond markets.  In terms of scheduled economic data, there was nothing significant.  The slow nature of the day has been strengthened right out of the gate that the Japan was on vacation (the Japan is almost solely responsible for the first hours of trading on the day the day in Treasury bills).

European trading did not much to the equation.  Most of the movement has come in response to the stock markets, but also a few titles concerning the situation in Ukraine.  I would hesitate, as a general rule, to the credit of the geopolitical headlines with too much movement at this stage, however.  In the days following a large reaction to geopolitical risk, it tends to get too much credit for subsequent movements.  Of course, it's not that glamorous or cut-and-dry, but simple household for trading positions can be as much a motivation as what either on days like today.

MBS had a better day in terms of their recent underpeformance vs treasures (something that we discussed in terms of probability, last week).  To quantify that, Fannie s 3.5 closed territory slightly stronger that best levels Friday so that 10 yr yields may not quite the same request.  The two has ended the day barely higher after falling levels much stronger this morning.

Priced below are delayed, note the timestamp at the bottom. Real time pricing is available via MBS's Live. Price from 5:36PMEST 21/07/14 re-evaluated today alerts and updates 13:23 : issued alert: markets bond slide after European fence; Negative to recalculate the risk factors 10:47 : market bond Gains accelerate as Stocks Slide 09:01 : bond markets hold Gains by weekend as to intensify global Tensions Jay Rodriguez : ' Tony, just IRRL may not be increased by more than 20% of PI, or veterinarian must qualify for credit. '' Tony Cardinal : "question IRRL goes for everyone... the P & I must it have a reduction of 5% for payment as an FHA loan?" Matthew Graham : "not really." "In general, I think that fence gets more credibility of the analytical community" Hugh w. Page : "MG you lend more credibility during closing or intraday high or low? It looks like the latter? Thoughts" Matthew Graham :" Yes, I think that it is because we are quite near the highs 'stably spread' of the year, then the absolute records were more short and spiky.» Should be easy to see expanding graphic to a display of 6 months and using chandeliers to see the commercial range of every day. » Michael Mitchell : 'thanks... '. "Based on the lender pricing - feels closer than it..." Michael Mitchell : "MG - Perspective-good value for money this year in version 3.5?" Discuss the MBS and mortgage markets on our dashboard streaming

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MBS RECAP: Market Monotony Broken By Geopolitical Events; Big Rally For Bonds

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Today offered a triple or possibly quadruple-whammy for bond markets, almost exclusively in the form of overseas events.  The weakest among these was the notion that yesterday's announcement of new sanctions against Russia was a profound market mover.  While that's technically possible, it wasn't plainly evident in overnight trading.

By the start of the domestic session, bond markets were only in slightly stronger territory.  The next boost was the only domestic consideration today.  June Housing Starts came in much weaker than expected and broke below a trend of growth that had been intact since the beginning of 2011.  Bond markets improved on the data, despite a stronger-than-expected Jobless Claims report. 

Trading proceeded in relatively uneventful fashion until the day's first geopolitical catastrophe unfolded when news hit of a Malaysian airliner being shot down on the Russia/Ukraine border.  this set the tone for the rest of the day as bond markets rallied steadily and stocks moved lower. 

This brought 10yr yields right to the important 2.47% level before the last major geopolitical headline came out.  Just after 3pm, Al-Jazeera reported that Israel launched a major ground/air/sea assault on Gaza.  Market reaction was sporadic, peaking in intensity at 3:15pm, but never really doing anything but carry yields and stocks lower.  Israel confirmed the news at 3:40pm.

As is always the case when it comes to global flights to safe-haven assets, Treasuries outperformed MBS handily.  Even so, MBS weren't completely tuned out from the rally, managing to gain 3/8ths of a point by the end of the day.  This brings Fannie 3.5s to 102-15.

Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live. Pricing as of 7/17/14 5:04PMEST Today's Reprice Alerts and Updates 4:09PM  :  Israel Ground Offensive in Gaza Sends Bond Yields Lower Still 2:17PM  :  Ongoing Positive Reprice Potential as Treasuries/MBS Hold Gains 10:08AM  :  Strong Philly Fed Data Reinforces Bounce Toward Weaker Levels 9:37AM  :  Bond Markets Stronger Overnight, and Another Boost From Weak Housing Data Matthew Graham  :  "yeah, it's still pretty sudden. And just because MBS are better positioned to soak up weakness doesn't mean a run to 2.66 in Treasuries wouldn't hurt" Hugh W. Page  :  "Still don't trust this rally just yet. Need some follow through IMO. I think for short timers it's a lock opportunity." Roland Wilcox  :  "MG so timely just shared analogy w/client who inquired about 10yr/MBS relationship" Sung Kim  :  "thank you MG, that really helped" Matthew Graham  :  "conversely, if broader markets lose ground, MBS will have already been lagging behind, and thus potentially not lose ground at the same pace." Matthew Graham  :  "That's what I meant by "slingshot" if broader markets improve." Matthew Graham  :  "when MBS are underperforming, they're like the dog pulling back reluctantly on the leash. Right now it's pretty stretched. If the master continues to walk forward, it could make for a relatively rapid move forward by the dog." Matthew Graham  :  "In this analogy, the "leash" is stretchy " Matthew Graham  :  "Let's begin by recalling an analogy we sometimes use of the 'Master and the Dog.' The overall momentum in bond markets is like the Master. The best benchmark we have for that is 10yr yields, which is why we talk about them so much. MBS are like the dog (and no, there's no deeper meaning here). The master sets the course for where the two will walk but the dog can tug at the leash--either reluctantly or eagerly. " Sung Kim  :  "MG, would you mind expounding on that comment?" Hugh W. Page  :  "That insight is invaluable info" Matthew Graham  :  "The fact that Treasuries are here with MBS having underperformed so consistently for the past 1.5 weeks may set us up for a bit of a slingshot if broader market stays strong, or to better endure weakness if broader markets bounce." Andy Pada, Jr.  :  "the real time chart is such an amazing tool" Andy Pada, Jr.  :  "as horrible the circumstances may be, I was able to lock in a bunch on live pricing at noon. " Discuss the MBS and Mortgage Markets on Our Streaming Dashboard

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MBS RECAP: Market Monotony Broken By Geopolitical Events; Big Rally For Bonds

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Today offered a triple or possibly quadruple-whammy for bond markets, almost exclusively in the form of overseas events.  The weakest among these was the notion that yesterday's announcement of new sanctions against Russia was a profound market mover.  While that's technically possible, it wasn't plainly evident in overnight trading.

By the start of the domestic session, bond markets were only in slightly stronger territory.  The next boost was the only domestic consideration today.  June Housing Starts came in much weaker than expected and broke below a trend of growth that had been intact since the beginning of 2011.  Bond markets improved on the data, despite a stronger-than-expected Jobless Claims report. 

Trading proceeded in relatively uneventful fashion until the day's first geopolitical catastrophe unfolded when news hit of a Malaysian airliner being shot down on the Russia/Ukraine border.  this set the tone for the rest of the day as bond markets rallied steadily and stocks moved lower. 

This brought 10yr yields right to the important 2.47% level before the last major geopolitical headline came out.  Just after 3pm, Al-Jazeera reported that Israel launched a major ground/air/sea assault on Gaza.  Market reaction was sporadic, peaking in intensity at 3:15pm, but never really doing anything but carry yields and stocks lower.  Israel confirmed the news at 3:40pm.

As is always the case when it comes to global flights to safe-haven assets, Treasuries outperformed MBS handily.  Even so, MBS weren't completely tuned out from the rally, managing to gain 3/8ths of a point by the end of the day.  This brings Fannie 3.5s to 102-15.

Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live. Pricing as of 7/17/14 5:04PMEST Today's Reprice Alerts and Updates 4:09PM  :  Israel Ground Offensive in Gaza Sends Bond Yields Lower Still 2:17PM  :  Ongoing Positive Reprice Potential as Treasuries/MBS Hold Gains 10:08AM  :  Strong Philly Fed Data Reinforces Bounce Toward Weaker Levels 9:37AM  :  Bond Markets Stronger Overnight, and Another Boost From Weak Housing Data Matthew Graham  :  "yeah, it's still pretty sudden. And just because MBS are better positioned to soak up weakness doesn't mean a run to 2.66 in Treasuries wouldn't hurt" Hugh W. Page  :  "Still don't trust this rally just yet. Need some follow through IMO. I think for short timers it's a lock opportunity." Roland Wilcox  :  "MG so timely just shared analogy w/client who inquired about 10yr/MBS relationship" Sung Kim  :  "thank you MG, that really helped" Matthew Graham  :  "conversely, if broader markets lose ground, MBS will have already been lagging behind, and thus potentially not lose ground at the same pace." Matthew Graham  :  "That's what I meant by "slingshot" if broader markets improve." Matthew Graham  :  "when MBS are underperforming, they're like the dog pulling back reluctantly on the leash. Right now it's pretty stretched. If the master continues to walk forward, it could make for a relatively rapid move forward by the dog." Matthew Graham  :  "In this analogy, the "leash" is stretchy " Matthew Graham  :  "Let's begin by recalling an analogy we sometimes use of the 'Master and the Dog.' The overall momentum in bond markets is like the Master. The best benchmark we have for that is 10yr yields, which is why we talk about them so much. MBS are like the dog (and no, there's no deeper meaning here). The master sets the course for where the two will walk but the dog can tug at the leash--either reluctantly or eagerly. " Sung Kim  :  "MG, would you mind expounding on that comment?" Hugh W. Page  :  "That insight is invaluable info" Matthew Graham  :  "The fact that Treasuries are here with MBS having underperformed so consistently for the past 1.5 weeks may set us up for a bit of a slingshot if broader market stays strong, or to better endure weakness if broader markets bounce." Andy Pada, Jr.  :  "the real time chart is such an amazing tool" Andy Pada, Jr.  :  "as horrible the circumstances may be, I was able to lock in a bunch on live pricing at noon. " Discuss the MBS and Mortgage Markets on Our Streaming Dashboard

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MBS RECAP: As Initial shock fades, bonds bearing

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The amount of the geopolitical upheavals in the world today is not materially better than yesterday, but no new surprises to the refuge fuel demand for bonds markets found no reason to extend the rally.  That said, if the rally has been somewhat exaggerated or made stronger by something like 'buy snowball', we would know it today.  The fact that there was not a more pronounced discharge reflects the seriousness of the situation and the real presence of the request for refuge yesterday.

MBS has started the day on the lowest of 3/32 and now go out in pretty much the same territory.  The weakness was most severe at the noon hour, but 10 yields had a firm rebound to 2.50%, which marked the end of the sale of momentum in markets bond for today.

Weekends can still bring significant developments when it comes to geopolitical market drivers.  More often than otherwise, if bond U.S. markets rallied on geopolitical risk heading into the weekend, they move in the opposite direction the next week.  As far as how that is played this time, volatility is potentially higher than normal because of a relative lack of events in the calendar in the coming week.  That leave markets more sensitive to headlines that it there are not many other things.

The week after is the opposite, with the first glance at the Q2 GDP, one announcement from the FOMC and NFP Friday.  It could well set the tone for the next major.

Priced below are delayed, note the timestamp at the bottom. Real time pricing is available via MBS's Live. Price starting from 18/07/14 4:01PMEST re-evaluated today alerts and updates 13:10 : Sell-Off is quiet for the moment. Decreasing slightly recalculate the risk 12:28 : alert issued: negative Reprices increasingly more Possible 11:21 : issued alert: tottering; Negative affect risk lurks 09:03 : Bond markets more low during the night; Bouncing Back in-house Session sklodzin : «"Hi all, does anyone of you know a specific rule that dictates the need to separate the coborrowers unmarried 1003?". Josh Olson : "question of UW: purchase of Condo, Conv, financing, 80% LTV, credit 808, 183 units, but 30% owned by investment group." Who will finance this loan?" Joseph Moran : "first sheet of daily rates. basically unchanged" Dan Clifton :"josh which should be pretty easy. 80% you need a comprehensive review, which is the assessment, questionnaire of condo, budget, insurance condo docs, the maximum number of investment shares is 49% on existing complex classics " Brent Borcherding :" OJ, is there a pattern specified for the Group holds 30%. "" We have an investment condo in Chicago that the constructor was required to maintain the 30% for rentals in a redevelopment district, he was part of the agreement with the city. Fannie approves condo projects, on a case by case, if documented." Josh Olson : "DC: Fannie Mae MRI guide indicates no more than 10%" Oliver Orlicki : "mg, we on the 3.5 or 4? '' Alan Craft : "most relevant 3.5 at the moment" Matthew Graham : 'Yes. 4.0 is relevant, but certainly more relevant 3.5 to the attributable risk. "Discuss the MBS and mortgage markets on our dashboard streaming"

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MBS RECAP: Uneventful Day Leaves Bond Markets Fairly Flat; MBS Underperform

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As the last few trades of the day trickle in, MBS are set to close almost perfectly in line with yesterday's closing levels.  Even before that, there hasn't been much movement to speak of. 

The hand-off from European trading was slightly negative this morning, but both MBS and Treasuries stayed inside yesterday's weakest levels.  Producer Prices came in "healthy," and while some credited that data for additional weakness in the morning, I'm not seeing it.  Bonds were already on an upswing and we're talking about 2.560 to 2.567 in 10yr yields.

It's a bit easier to make a case for weaker Industrial Production at 9:15am as a modest benefot to bond markets.  More than anything though, slumping stocks and 'asset allocation' flows (money managers selling stocks to buy bonds) helped keep the range contained for MBS.

Despite the contained range, however, MBS struggled a bit compared to Treasuries.  10yr yields are near their best 2-day levels while MBS are roughly in the middle of theirs.  That underperformance has been a fairly consistent theme for nearly 2 weeks now.

Yellen's second day of congressional testimony provided nothing more than a few good laughs.  There were no noticeable market reactions.  The calendar provides a bit more to go on tomorrow with Jobless Claims, Housing Starts, and Philly Fed.

Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live. Pricing as of 7/16/14 4:42PMEST Today's Reprice Alerts and Updates 11:10AM  :  Back to Unchanged Levels as Stocks Slide 9:05AM  :  Bond Markets Slightly Weaker After Neutral Overnight Session Nathan Miller  :  "thx rob, it is, do you know their down pmt requirement on a purch off hand?" robert clark  :  "NMSI if the loan amount is higher than $417,000" Nathan Miller  :  "outside of the hard money lenders, anyone know a stated income lender for a deal in CA? self emp brwr." William Hansen  :  "10 yr Green 3.5 FNMA Red. Hopefully FNMA turns. " Discuss the MBS and Mortgage Markets on Our Streaming Dashboard

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MBS RECAP: Weaker Trend Intact after Retail Sales and Yellen Testimony

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As far as today's market movers are concerned, Retail Sales was dwarfed by Yellen, but most of the reaction to Yellen cancelled itself out.  In other words, Retail Sales accounted for the only decisive push into weaker territory this morning.  Yellen accounted for bigger moves but deposited trading levels right where they had been after Retail Sales.

The damage was anything but severe with Fannie 3.5s not even down an eighth at the moment and 10yr yields up less than a bp.  That said, yesterday was more decisively weak and today's more active session now acts as a sort of confirmation of that weakness. 

This keeps the pressure on bond markets from a technical standpoint in that the possibility of a reversal back to the higher end of the rate range is still alive.  The saving grace was that 10yr yields bounced nicely at 2.57, which is not only a well-traveled inflection point, but also the mid-point for a few technical studies.  Bottom line, staying under 2.57 keeps hope alive.

Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live. Pricing as of 7/15/14 4:42PMEST Today's Reprice Alerts and Updates 4:06PM  :  Ongoing Weakness Heading Into Last Hour; MBS Still Off Lows 11:27AM  :  Holding Ground/Moderate Bounce; Reprice Risk Pulling Back 11:01AM  :  ALERT ISSUED: Negative Reprice Risk is Increasing 10:33AM  :  ALERT ISSUED: Back Into Weaker Territory as Yellen Q&A Begins; Lows of the Day 10:07AM  :  Back in Positive Territory As Yellen Testimony Begins 8:45AM  :  Bond Markets Weaker After Retail Sales Matthew Graham  :  "depends what you're wanting your boundaries to represent. Definitely 2.66 is important on the high end. On the bullish side, there are more choices. 2.47 and 2.40 are long-term and fairly epic. But some people look at 2.47-2.51 as "2.5" and call it good. In general, it's hard to argue with that stance as trading has been compartmentalized between 3.0 and 2.5 for the most part since mid 2013" Andrew Haynes  :  "im looking at a long term range of 2.43-2.65 and short term of 2.61-2.51 does that sound about right MG?" Michael Mitchell  :  "Hey Guys- What Lender (Retail, correspondent, Wholesale) is still doing Interest only on Jumbo?" Andy Pada, Jr.  :  "i read something like 66%" Christopher Stevens  :  "anyone know Chase drop in mtg business year over year" Discuss the MBS and Mortgage Markets on Our Streaming Dashboard

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MBS RECAP: Steadily Weaker All Day, but for no Particular Reason

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Bond markets simply *were* weaker today.  Certainly, there was no overt reason for this, and the less obvious reasons are open to debate.  Even if we could assign perfect measures of blame to various factors, trading was so sparse today that we can't really assume we were looking at a representative sample of sentiment.  Things could be better or worse when participation picks up (likely tomorrow).

As for the factors in question, there aren't many.  A general pull-back in the risk tone overnight is part of the equation.  All that means is that global financial markets showed fewer signs of being preoccupied with European contagion, allowing stocks to improve a bit and bond yields to move slightly higher.

Beyond that, there were a few big trades that stood out on the slow day, prompting other traders to follow suit.  And finally, the technical outlook was at risk of turning negative for bonds on Friday.  The morning weakness confirmed that and helped keep a very small amount of negative momentum intact.

Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live. Pricing as of 7/14/14 4:19PMEST Today's Reprice Alerts and Updates 2:56PM  :  ALERT ISSUED: Negative Reprices Increasingly Possible 1:49PM  :  ALERT ISSUED: Small Increase in Negative Reprice Risk 10:44AM  :  ALERT ISSUED: Quick Move to New Lows; No Major Reprice Risk Yet 9:04AM  :  Bond Markets Slightly Weaker Overnight; Slow Session so Far Sung Kim  :  "SS is totally different than foreclosure and will change to a flat 4 on the next DO release" Victor Burek  :  "7 with less than 10% down, 4 with 10% down and 2 with 20% down" Chip Harris  :  "short sale same 7 year waiting period as FC for conventional right?" Discuss the MBS and Mortgage Markets on Our Streaming Dashboard

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MBS RECAP: Bond Markets Slightly Stronger Today, Capping Full Week of Gains

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Treasuries and MBS walked a cautious path to the exits today, staying perfectly inside the middle of yesterday's trading range.  The overnight session was less dramatic than recent examples and Treasury trading in Asia/Europe seemed less interested in Portuguese drama.

Interestingly enough, Treasuries actually performed better than German Bunds, hinting at some underlying/inherent strength in US bond markets.  MBS were feeling the same vibes and kept decent pace with the rally.

Prices improved steadily until just after the noon hour.  From there on out, everything went sideways after a brief correction.  Bonds seemed to take limited cues from equities markets, but volume and participation were so low that it doesn't make sense to read much into the movement.

Bottom line, looking at things from a 10yr Treasury perspective, yields are right near the zone that has seen the bigger bounces of 2014 (2.47-2.52).  The risk is that this becomes an extended resistance area that makes for a longer term bounce.  This could be ruled out with a break below 2.40, but until we're heading more convincingly in that direction or actually making that break, I'm feeling a bit more cautious heading into next week.

Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live. Pricing as of 7/11/14 5:30PMEST Today's Reprice Alerts and Updates 2:51PM  :  ALERT ISSUED: Reprice Risk Increasing as Afternoon Leakage Shows Up 2:34PM  :  Gains Mostly Holding; Slight Pull-Back in MBS; Uneventful Trading Day so Far 9:18AM  :  Slightly Stronger After Uneventful Overnight Session Hugh W. Page  :  "Perhaps, but if we bounce again and yields retreat higher here we could easily be back over 2.60 or higher in pretty short order." Victor Burek  :  "thats why i feel longer term loans should risk floating" Hugh W. Page  :  "This is the second test of this level on the 10 yr in the last 2 weeks. I want to break through before I pull up the anchor on the float boat." Matthew Graham  :  "yesterday's low yields starting to form some messy potential resistance around 2.50. Longer we go without getting to 2.47, the more locky I'd feel." Victor Burek  :  "rates i have seen are a little worse than yesterday, so we are due for more reprices" Victor Burek  :  "let me add, would only lock short termers if lender reprices better" Kenneth Crute  :  "Vic saying lock, on a friday no less?? anyone see horseman riding across the sky?" Victor Burek  :  "if within 15 days...probably not a bad idea to lock today...longer term i am floating" Victor Burek  :  "no, short termers should consider it" Joseph Daquino  :  "VB probably disagrees :)" Joseph Daquino  :  "I think that today is presenting a great opportunity to lock. " Discuss the MBS and Mortgage Markets on Our Streaming Dashboard

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MBS RECAP: Day without incident of bonds markets relatively stable sheets; Registered results below MBS

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As the trades last few day trickle in, MBS are fixed to close almost perfectly in line with levels of closing yesterday.  Even before that, it was not eventful to talk about.

The main force of European trade has been slightly negative this morning, but the MBS and treasuries remained inside the lowest levels of yesterday.  Producer prices came in 'good health', and while some credited these data further weakness in the morning, I do not see it.  Obligations were already on a recovery and we are talking about the yields of about 2,560 to 2.567 in 10 years.

It is a bit easier to make a case for the weaker Industrial Production at 9:15 as a modest benefot to bond markets.  More than anything , collapse of stocks and flows of "asset allocation" (fund managers sell stocks to buy bonds) helped keep the range contained for MBS.

Despite the diversity of content, however, MBS has struggled somewhat compared to the Treasury bills.  10 yr yields are close to their 2 best days levels while MBS are roughly in the middle of their.  This incompetence has been a fairly constant theme for almost 2 weeks now.

Second day of Yellen's testimony provided Congressional nothing more that a few good laugh.  There is no significant market reaction.  The calendar is a bit more go tomorrow with unemployment insurance, starts and Philly Fed.

Priced below are delayed, note the timestamp at the bottom. Real time pricing is available via MBS's Live. Price starting from 16/07/14 4:42PMEST recalculate alerts and updates of today 11:10 : return to unchanged as Stocks Slide levels 09:05 : slightly lower than after neutral bond markets night Session Nathan Miller : "thx rob, it's, you know their requirement of pmt down on a purchase off-hand?" Robert clark : "#NMSI if the loan amount exceeds $ 417,000" Nathan Miller : "Apart from hard money lenders, someone knows a lender from income reported for a deal in CA? self emp brwr. » William Hansen : "10 yr green red FNMA 3.5." I hope that the FNMA is transformed. "Discuss the MBS and mortgage markets on our dashboard streaming"

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MBS RECAP: Weaker Trend Intact after Retail Sales and Yellen Testimony

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Gain access to the most accurate real-time back month TBA indications from Thomson Reuters and Tradeweb. LEARN MORE MBS RECAP: Weaker Trend Intact after Retail Sales and Yellen Testimony

As far as today's market movers are concerned, Retail Sales was dwarfed by Yellen, but most of the reaction to Yellen cancelled itself out.  In other words, Retail Sales accounted for the only decisive push into weaker territory this morning.  Yellen accounted for bigger moves but deposited trading levels right where they had been after Retail Sales.

The damage was anything but severe with Fannie 3.5s not even down an eighth at the moment and 10yr yields up less than a bp.  That said, yesterday was more decisively weak and today's more active session now acts as a sort of confirmation of that weakness. 

This keeps the pressure on bond markets from a technical standpoint in that the possibility of a reversal back to the higher end of the rate range is still alive.  The saving grace was that 10yr yields bounced nicely at 2.57, which is not only a well-traveled inflection point, but also the mid-point for a few technical studies.  Bottom line, staying under 2.57 keeps hope alive.

Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live. Pricing as of 7/15/14 4:42PMEST Today's Reprice Alerts and Updates 4:06PM  :  Ongoing Weakness Heading Into Last Hour; MBS Still Off Lows 11:27AM  :  Holding Ground/Moderate Bounce; Reprice Risk Pulling Back 11:01AM  :  ALERT ISSUED: Negative Reprice Risk is Increasing 10:33AM  :  ALERT ISSUED: Back Into Weaker Territory as Yellen Q&A Begins; Lows of the Day 10:07AM  :  Back in Positive Territory As Yellen Testimony Begins 8:45AM  :  Bond Markets Weaker After Retail Sales Matthew Graham  :  "depends what you're wanting your boundaries to represent. Definitely 2.66 is important on the high end. On the bullish side, there are more choices. 2.47 and 2.40 are long-term and fairly epic. But some people look at 2.47-2.51 as "2.5" and call it good. In general, it's hard to argue with that stance as trading has been compartmentalized between 3.0 and 2.5 for the most part since mid 2013" Andrew Haynes  :  "im looking at a long term range of 2.43-2.65 and short term of 2.61-2.51 does that sound about right MG?" Michael Mitchell  :  "Hey Guys- What Lender (Retail, correspondent, Wholesale) is still doing Interest only on Jumbo?" Andy Pada, Jr.  :  "i read something like 66%" Christopher Stevens  :  "anyone know Chase drop in mtg business year over year" Discuss the MBS and Mortgage Markets on Our Streaming Dashboard

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