Now that bonds have broken through previous resistance levels (.58 in 10yr yields and 103.00 in 2.0 UMBS), what comes next? Rather than look for fast-paced follow-through, it would be enough of a victory to merely see bonds maintain these newly acquired levels. Today we'll discuss what those levels might look like and what we'd need to see for them to persist.
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20min of Fed 30yr UMBS Buying 10am, 1130am (M-F) and 1pm (T-Th)
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ISM Manufacturing 54.2 vs 53.6 f'cast, 52.6 prev
Bonds were only modestly weakner at the beginning of the overnight session. It wasn't until 7:49am that Treasuries popped a bit higher in yield. They've been pushing a bit higher since then. MBS, on the other hand are unchanged now, and have improved slightly so far today. The discrepancy could most easily be explained by traders setting up new trading positions or making allocation changes for a new month.
No major changes since the last update. MBS have been trading a narrow range around 'unchanged.' Treasuries are still slightly weaker. Corporate bond issuance is adding to the Treasury-specific pressure.
MBS Market Alerts
