Bonds are in the throws of an extended negative momentum move that's been in place throughout October. At times, stimulus-related headlines have accounted for volatility during this move. Today was one of the handful of weaker days for Treasuries, yet MBS are down only 1 tick heading into the end of the day. They've been doing this a lot lately, and it makes it even easier for lenders to avoid raising rates nearly as quickly as the broader bond market suggests.
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20min of Fed 30yr UMBS Buying 10am, 1130am (M-F) and 1pm (T-Th)
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Jobless Claims 787k vs 860k f'cast, 842k prev
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Existing Home Sales 6.54m vs 6.3m f'cast, 5.98m prev
Bonds opened slightly stronger in Asia and remained almost perfectly flat throughout the overnight session. There was a brief moment of selling pressure just now following the stronger-than-expected Jobless Claims data. But 10yr yields are staying in their overnight range, down 1.5bps at .806%. MBS are up 1 tick (+0.03).
Losing ground now, somewhat abruptly relative to the overnight calm. Weakness follows headlines quoting Pelosi saying stimulus could be passed before election and that talks with Trump are on a good path. Treasuries turned negative and are 2bps higher vs 830am. MBS are also in the red, down 2 ticks (0.06) at 102-30 (102.94).
MBS have bounced back nicely, ONCE AGAIN outperforming Treasuries which are still near their weaker levels of the day. Stimulus headlines at 10:45am (read more) were the culprit. 10yr is up just over 2bps. MBS are down only 1 tick (0.03).
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