Thursday proved to be a very forgettable session for the bond market with trading levels technically weaker on the day, but right in line with most of Wednesday's trading. MBS were actually a bit better than that with prices ultimately making it back to 'unchanged' levels even as 10yr yields remained 2-3bps higher. In the bigger picture, the new, lower rate range persists. Weaker GDP data and a weaker 7yr auction did nothing to challenge it.
-
Fed MBS Buying 10am, 1130am, 1pm
-
GDP 6.5 vs 8.5 f'cast, 6.3 prev
-
Jobless Claims 400k vs 380k f'cast, 424k prev
-
Pending Sales -1.9 vs +0.3 f'cast, +8.3 prev
flat to slightly weaker overnight. EU econ data added to weakness around 4am, but we're still in the recent range. 10yr up 2.3bps at 1.261%. MBS down less than an eighth.
Initial reaction to data was modestly stronger, but both MBS and Treasuries have now returned to pre-data levels (same as the last update).
Sideways to slightly stronger all day. Modest rally at 11am in Treasuries mainly (chalked up to month-end and corporate bond hedging flows). Then more weakness into (and out of) the 7yr auction. Net effect=MBS and TSYs still in the same range set in the first hour of trading.
MBS Market Alerts
