Mortgage
backed securities (MBS) lost -21 basis points from Monday's close which caused
30 year fixed rates to move higher.
We had a very light day for economic data with two lower level reports. The Richmond Fed Manufacturing Index was dismal falling well short of market forecasts (-11 vs 7) and the Housing Price Index was very close to market expectations (.07% vs 0.8%). Neither event impacted MBS pricing in a material way.
We had a very light day for economic data with two lower level reports. The Richmond Fed Manufacturing Index was dismal falling well short of market forecasts (-11 vs 7) and the Housing Price Index was very close to market expectations (.07% vs 0.8%). Neither event impacted MBS pricing in a material way.
And
much of yesterday's sell off was simply that. MBS have had a heck of a run
(+131BPS last week and +129BPS the week prior to that). Ask yourself...if you
were taking the risk with your own money....what would you do? Of course you
would sell off and take those gains.
MBS had their best levels at
12:06 EDT when the FNMA 3.5% August coupon was at +0 and we had a our worst
levels of the day at 3:15EDT when the same coupon was down -34BPS.
We did have a 2 year Treasury auction at 1:00EDT but MBS did not react to the auction results as they are too short term to impact the longer end of the yield curve.
The stock market (as measured by the DOW) did hit a new record but today's sell off in MBS was more due to profit taking than in reaction to the stock market gains.
We did have a 2 year Treasury auction at 1:00EDT but MBS did not react to the auction results as they are too short term to impact the longer end of the yield curve.
The stock market (as measured by the DOW) did hit a new record but today's sell off in MBS was more due to profit taking than in reaction to the stock market gains.
I
still strongly recommend locking your interest rate
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