The September delivery Fannie Mae 4.0 is -0-06 at 101-11 while the FNCL 4.5 is -0-02 at 103-17. The secondary market current coupon is 3.6bps higher at 3.772%. Yield spreads are tighter vs. both Treasuries and interest rate swaps.
Yield levels are lower across the curve but off the best levels of the overnight session. The 2 year note yield is 0.8bps lower at 0.585% while the 10 year note has rallied 3.1bps to 2.932%.
The 3.50% coupon bearing 10 year TSY note is +0-04 at 103-27, 1.3bps lower in yield at 3.045%. Price action has been all over the place in VERY LIGHT VOLUME....but the range is containing chopatility.
Rate sheet influential MBS are exhausted. Though we should be seeing continued rate improvement due to stock market declines, MBS strength is not showing it. Rates have seemed to hit a bottom.
Stocks are selling and bonds are rallying.
S&Ps currently -24 at 1080....
The descending triangle chart formation I talked about on Wednesday has played out as the pattern suggests...with continuation to the downside. READ MORE
10s +28 at 101-30 yielding 3.268%...
The FN 4.5 is +0-08 at 102-10. The secondary market current coupon is 5.2bps lower at 4.115%. Yield spreads are wider.
It is still unclear whether the stock market rally we witnessed yesterday was simply a short term correction in the context of a broader downtrend or a bottoming out/trend reversal. Volume in equities was below average which implies upside momentum is limited.
My name is Mike Rogers, I'm the interest rate advisor to RealestateloanS.com. I've been in the mortgage business since 1989. Please contact me with questions through the contact link on our front page for more information
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