Activity in the rates market has slowed following the 2yr note auction....even before then there wasnt much to discuss. This was expected as traders get flat (exit positions) ahead of the FOMC statement tomorrow.
Here is a rundown of market action...
Rate sheet influential mortgage backs are essentially flat, trading +0-03 at 100-18. Supply from originators has been muted....what has been offered up by mortgage bankers was easily eaten up by official Fed buying $$$. Trading flows are slow elsewhere in the coupon stack as well....slightly wider MBS/TSY yield spreads reflect a"wait and see" attitude.
WARNING: it wouldnt surprise us if some random reprices for the worse occur. Lenders will be looking to protect themselves just as trader's are...
Here is the FN 4.5 two day...we've failed attempts at 100-20 three times meow.
In the TSY market, 125,000 2s have traded, 315k 5s, 625K 10s, and 175k 30s. In terms of our curve bias (steeper or flatter)...the yield curve is mostly unchanged today. Before the 2yr note auction 2s/10s spiked up to 251bps, however after the auction that sector tightened up and is currently at the lows of the day...albeit only 1bp tighter than yesterday's 5pm marks. 2s vs. 5s are 2bps tighter (flatter) and 5s vs. 10s are unchanged....nothing to get excited about yet ...remember trading flows are slow ahead of the FOMC tomorrow, but we will nonetheless continue to monitor weak spots and dominate curve strategies ahead of the 5yr note auction tomorrow.
Here are 2s vs. 10s...
Here are 5s vs.10s...
After trading lower overnight, the dollar has been sideways in the $76 handle all day.
After moving lower yesterday, NYMEX crude traders have just about recovered yesterdays price losses....CLZ has been mostly sideways since hitting a $71.65 ceiling...
Gold is sideways....
AND
STOCKS ARE SIDEWAYS after making morning gains
NOTICE A PRE-FOMC THEME HERE?????
SIDEWAYS?
Its date night in my house. Kaycie and I will be attending the Nationals-Dodgers game. I am hoping it doesnt rain.
MBS Market Alerts
