This week began with a decisive breakout to higher yields in the bond market. Stimulus negotiations have been in focus and some sort of deal remains totally guaranteed, but with unknown timing and magnitude. Bonds braced for that reality by moving weaker and then narrowly sideways as the week progressed. Volatility could be relatively more contained until we get more clarity on stimulus.
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20min of Fed 30yr UMBS Buying 10am, 1130am (M-F) and 1pm (T-Th)
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Wholesale Inventories 0.4 vs 0.5 f'cast, 0.5 prev
Stocks were essentially flat overnight while bonds mostly rallied until domestic trading got underway in the US. After the early selling pressure, both Treasuries and MBS are unchanged versus yesterday's latest levels.
Bonds lost ground at 11:45am ET due to stimulus headlines (more here), but have mostly managed to get back under the relevant technical ceiling in terms of 10yr yields (.785% currently vs a .79% ceiling). 2.0 UMBS are now outperforming, down only 1 tick on the day at 103-07 (103.22).
Bonds gaining a bit more ground now--faster than stock market weakness would suggest. 10yr safely back under .79 ceiling at .774%. 2.0 UMBS still down 1 tick (0.03) on the day. Markets are drifting without much guidance heading into the 3-day weekend.
MBS Market Alerts
