On Tuesday, current coupon MBS outperformed treasuries by ~1/32nds. Mortgage originations continue to be down finishing the day at $1.9B. Today, the Fed investment operation focus will be on Fannie and Freddie securities, purchasing $1.15B of 30yr product. In agency swaps, the Gold/Fannie 3.5’s moved higher increasing by.50/32nds to .50/32nds, the 4’s and the 4.5’s remained unchanged at flat and-3.5/32nds respectively. The Ginnie2/Fannie 3.5 swap closed at 41/32nds. At 5:00pm, the FNCL 3.5’s were up by 13.5/32nds closing at 102-02+ and FNCI 3’s were up by 10.5/32nds closing at 102-15+.
The MBA Mortgage Application index was released earlier this morning and showed a decrease of 2.7% for the week ended March 17 after rising 3.1% in prior week. Purchase applications were down 2.1% after rising 2.3% in prior week. Refi applications were down 3.3% after rising 4.1% in prior week.
Equites closed lower on yesterday, the S&P 500 was down 29.45 points ending at 2,344 ,the DIJA was down 237.85 points ending at 20,668, and the NASDAQ was down 107.70 points ending at 5793. Stocks took a tumble yesterday as questions grew about the ability of President Trump’s policies, notably healthcare, to make it through Congress.