MBS traders put out a meager effort in yesterday's session....volume was below normal and flows were sparse at best as the market has succumb to the block buying powers of the Federal Reserve. Yesterday the Fed quickly swallowed up any originator offerings keeping price action in a three tick range all day. Treasuries swayed back and forth around the median market bias....for the 10 yr TSY note that middle ground was 3.25%. Anything lower and profit takers were...profit taking.....anything higher brought out bargain buying. Stock markets behaved in a similar manner...early session lows, mid day highs, sideways for a time before heading back down to lows by day's end. Overnight stocks were up some and down some with the general tone being...EH. The yield curve was essentially unchanged/sideways as well.
In the day ahead the economic calendar is minimal. Treasury Secretary TIIIIMMMAAAY goes before the Senate Banking Committee to talk about TARP with our nations "leaders"....questions/grilling will likely venture into other areas though. At 2pm the Federal Reserve will release the minutes from the previous FOMC meeting. We'd expect to read a reiteration of a range bound fed funds rate (0.00% policy) for at least the year to come as inflation will stay stuck in the shadow of the demand side deflator...job losses.
Market participants of all kinds, stocks and bonds alike, are still in search of conviction....so to pass the time they profit from the reactive retorts of an anxious investment herd and the looming liquidity providing presence of the Federal Reserve. Selling into the strength has spread through all markets....up then down then sideways some before heading up then down and sideways some more...range bound.
Since 5 pm "Going Out" Marks....
FN30________________________________
FN 4.0 -------->>>> +0-02 to 99-31 from 99-29
FN 4.5 -------->>>> +0-01 to 101-25 from 101-24
FN 5.0 -------->>>> +0-02 to 102-26 from 102-24
FN 5.5 -------->>>> +0-02 to 103-21 from 103-19
FN 6.0 -------->>>> +0-01 to 104-25 from 104-24
GN30________________________________
GN 4.0 -------->>>> +0-03 to 99-29 from 99-26
GN 4.5 -------->>>> +0-02 to 101-29 from 101-27
GN 5.0 -------->>>> +0-02 to 103-16 from 103-14
GN 5.5 -------->>>> +0-00 to 104-02 from 104-02
GN 6.0 -------->>>> +0-00 to 104-22 from 104-22
UST10YR: +0-05 yielding 3.232%
2s/10s: 234.92 bps
EFFECTIVE FED FUNDS: -0.01 to 0.15 from 0.16
LIBOR FIXINGS
O/N LIBOR: +0.0025 to 0.2212 from 0.2188
1 MONTH: -0.0012 to 0.3081 from 0.3094
3 MONTH: -0.0362 to 0.7163 from 0.7525
6 MONTH: -0.0387 to 1.2413 from 1.2800
1 YEAR: -0.0337 to 1.5488 from 1.5825
MBS Market Alerts
