The Day Ahead: Beige Book, Treasury Auction, Heavy Corporate Debt Supply
September 8, 2010 – 4:13 amPosted To: MBS Commentary
Recap of Yesterday Lost rate sheet rebate was restored yesterday as the bond market benefited from a reversal of demand for risky assets (stocks sold) and an onslaught of swapable corporate debt supply. Loan pricing was aggressive out the gate so not all lenders repriced for the better, but several of the mid-majors did recall and re-issue. While rebate did improve, less than $1.5 billion in new loan supply was offered by originators in the TBA market with the majority of hedges seen in 4.0 30-year paper, indicating the refi market has slowed since last week (or secondary is over hedged). The benchmark 10-year Treasury note went out +1-00 (32/32) at a price of 100-08 yielding 2.598% (-11.5bps) and the October FNCL 4.0 ended the session +0-17 at 102-31 yielding 3.566%. Swap spreads tightened…(read more)