After days like Monday (in which the bond market lost ground at the fastest pace in months due to the Pfizer vaccine news), we can see one of three things: a quick bounce back, a pause for reflection, or additional selling pressure. Today's session offered mixed blessings. Treasuries generally held under yesterday's same ceilings, but they certainly didn't rush to give an indication of a supportive bounce on the horizon. Basically, we're in limbo, and there are reasons to be cautious and hopeful, though probably more of the former until further notice.
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20min of Fed 30yr UMBS Buying 10am, 1130am (M-F) and 1pm (T-Th)
Bonds started the overnight session in slightly stronger territory but began selling as soon as European markets opened for the day. 10yr yields are up 3bps to .954% and 2.0 UMBS are 1 tick weaker (-0.03) at 102-31 (102.97).
Slow, steady gains after AM weakness. Both stocks and bonds improving (an interesting move for Treasuries heading into the 1pm 10yr auction). 10s are still up 2.5bps on the day though (.95%). MBS are UP 3 ticks (.09) at 103-02 (103.06).
Noticeable but moderate weakness after 10yr Treasury auction--mostly a factor for Treasuries, but MBS aren't immune. 10yr yields up 3.7 bps on the day at .961. They were trading around .94% before the auction. 2.0 UMBS up 1 tick (0.03) on the day after being 3 ticks (.09) higher before the auction.
The late day sell-off fizzled out at 3pm, but not before MBS had lost enough ground for a few negative reprices. 10yr yields went no higher than the morning's highs (which in turn were no higher than yesterday's highs). Nonetheless, there's a decidedly obvious trend of "higher lows" in yields that encourages us not to get our hopes up for a big bounce back just yet.
MBS Market Alerts
