MBS RECAP: Muted Bond Volatility Means More Love For MBS

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Posted To: MBS Commentary

The past several days have been very good to the mortgage market. The secondary side of the market had been waiting for spreads to be able to tighten versus benchmarks. That's definitely happening. The primary side of the market had been waiting for lender pricing to tighten versus MBS. That's also definitely happening. Notably, the latter is a bit of a moving target depending on the lender, but more than any other recent day, almost every lender moved into better territory by a bigger-than-normal amount and hit the best levels they've offered since 2016. All of the above is what we expected to see, eventually, as mortgages endured a painful bout of underperformance in the first 2/3rds of August. Things began to level-off by the last part of the month, but it's really only been…(read more)

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