Today's Market UpdateJul 11 2013
Here’s our VP of Secondary Marketing's rundown on what has transpired in rates/mortgages over the last 24 hours:
"Taking its cue from Bernanke’s dovish comments yesterday, mortgages opened higher on very thin volume. From there, Fannie 3.5s jumped up and down all day. We saw several re-prices downward early as Fannie 3.5s sold off ½ point by lunchtime. At 1pm , the UST’s $13 billion 30yr auction was well received by both direct and indirect bidders, and Treasuries and mortgages have rallied ever since. 3.5s closed near this morning’s open, up nearly a point from yesterday’s close. While mortgages have had a decent bounce this week and gained back all of the losses from last week’s Employment report, I still feel the market is severely wounded. TBAs are trading well, but anything “non-deliverable”, including ARMs and Agency Jumbo, is very hard to trade. Since so many people have been asking about ARM pricing, here goes. The biggest buyer of ARMs has been REITs. Most of the REITs are in sell mode right now, trying to free up capital to meet margin calls. Dealers are stuffed as well, so without REITs to take them out, it’s hard to even get a bid on ARM MBS. The result is what you see on lender rate sheets for ARMs right now – zero liquidity."