MBS CLOSE: Lower Coupons Flat While Premiums Rally

Posted To: MBS Commentary

The sense of increasing stability that accompanied early afternoon gains stuck it out right through the close to send MBS out the door a tick higher than yesterday at 101-03. 10yr Tsy notes couldn't even manage a similarly "huge" tick movement, ending unchanged by 5pm standards with a yield of 3.61. The bulk of the excitement today, other than the 8 ticks between highs and lows in 4.5's that seemed to enjoy some AM volatility, was in the premium coupons where 5.5's and 6.0's rallied to the tune of a quarter point on freshly available details on how Fannie will participate in the 120+ day delinquency buyouts. This had the mortgage world buzzing quite a bit more than treasuries today with plenty of the volume coming up-in-coupon and readjusting various inter-coupon positions...(read more)

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