Until further notice, we can expect to see the bond market drift in a fairly consistent range, making modest course course corrections depending on the covid outlook. We can also dig into the nuts and bolts of the mortgage bond market to ask and answer questions about how low rates can eventually go. The answer is actually surprisingly simple.
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20min of Fed 30yr UMBS Buying 10am, 1130am (M-F) and 1pm (T-Th)
Bonds opened the overnight session slightly stronger. Stocks were slightly weaker. No major movement since then, but a slightly stronger bias in bonds in early domestic trading.
Yields found bottom right in line with Friday's lows (.60%) and have been moving higher since roughly 9am. 2.0 UMBS bounced at their Friday highs shortly thereafter and are down about 2 ticks (0.06) since then.
MBS and Treasuries both just turned negative on the day, but not for any particular reason. The only suspect at the scene of the crime was simply the close of the European bond market (it's not uncommon to see tradeflows shift after a major market closes/opens for the day).
After a bit more weakness, both Treasuries and MBS found support. Both are near unchanged despite ongoing strength in stocks.
MBS Market Alerts
