It was a slow trading day for the most part until the last 90 minutes. Until then, MBS and Treasuries were generally flat. As the day wound down, yields bumped up to the highs--right in line with the 1.295% technical level--and MBS coughed up a quick eighth of a point. That was enough for several lenders to reprice for the worse even though the weakness doesn't speak to any bigger picture issues. At worst, we could consider the late-day volatility to be a warning shot about bond trader defensiveness ahead of Wednesday's Fed announcement.
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Fed MBS Buying 10am, 1130am, 1pm
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New Home Sales -6.6% vs +3.0% f'cast, -7.8% prev
Stronger overnight. Yields fall in line with stock sell-off, bouncing in early EU trading, but still green in US trading. 10yr down 2.3bps at 1.258 and UMBS 2.0 coupons up 3 ticks (0.09) at 101-25 (101.78).
Steady weakness all morning, with the sharpest move following the 9:30am NYSE open. Weaker new home sales data isn't helping. 10yr yields now unchanged at 1.281 and UMBS 2.0 coupons nearly unchanged at 101-23 (101.72).
Still under some pressure, but mostly sideways for the past few hours. 2.5 UMBS showing more damage than 2.0 coupons, but not enough for significant reprice risk. 2.0 coupons are unchanged at 101-22 (101.69). 10yr still at 1.28%.
Sharper weakness late in the day. No discrete cause. MBS down an eighth of a point. Several negative reprices. 10yr yields up 1.5bps to 1.296%.
MBS Market Alerts
