With Fed day behind us, the much-anticipated stimulus/spending bill is all that stands in the way of the bond market tuning out for the rest of the year--something it loves to do on years where there hasn't been much volatility in the 4th quarter. This morning's economic data did it's best to push yields lower, but traders moved quickly to defend the prevailing range. MBS outperformed, but neither side of the market was far from where it started by the end of the day.
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20min of Fed 30yr UMBS Buying 10am, 1130am (M-F) and 1pm (T-Th)
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Jobless Claims 885k vs 800k f'cast, 862k prev
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Philly Fed 11.1 vs 20.0 f'cast, 26.3 prev
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Housing Starts 1.547m vs 1.530m f'cast, 1.528m prev
Bonds were almost perfectly flat in the overnight session and very close to unchanged. This won't continue to be the case if lawmakers in the US can deliver a stimulus/spending bill or if lawmakers in the EU can finalize a Brexit trade deal, but either way, mortgage rates should be fairly well-insulated from broader bond market volatility.
Noticeably strong reaction to noticeably weak econ data (big jump in jobless claims and big drop in Philly Fed). Treasuries and MBS both turned green on the data after being slightly weaker to start the day.
Moderately brisk weakness after a handful of stimulus headlines. Combined with modest weakness in the past 2 hours, it brings MBS down more than an eighth from the highs (1.5 coupons now unchanged on the day). 10yr yields are back up to .916 after hitting lows of .891.
MBS Market Alerts
