MBS MID-DAY: Exceptionally Quiet, But Positive
By:
Matthew Graham
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MBS Live: MBS Morning Market Summary
The insignificance of this week of trading is being driven home ferociously. Actually, it could be considered significant in the same way that a cartographer mapping out the Mississippi finds the second mile of water explored to generally flow in the same direction as the first mile, concluding "this river goes twice as many miles in this direction!" But that says nothing of the other 2318. In other words, bond markets have done nothing but continue the same post-NFP trend since--well... NFP! In the process, they've been careful not to return to stronger territory than the few days leading up to NFP. Here on the final day of the insignificant week, volume is completely non-existent, technical levels are being adhered to, yesterday's range remains wider than today's ("inside day"), and the only possible source of market movement (Fed's POMO buying) is the only thing causing any movement (and in a predictable way). These are some hallmarks of inconsequential drifting. It happens to be going in our favor today.
MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
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Morning Reprice Alerts and Updates
Below is a recap of instant Reprice Alerts and updates issued via email and text alert to MBS Live subscribers this morning.
9:39AM :
Treasuries Respecting Trend; MBS Slightly Higher
The "Day Ahead" commentary began with the following sentence: "There are few days that look less important than today in today in terms of big-picture changes to bond market landscape." So far this morning, that is being proven out perfectly. Volume will be lucky if it's not the lowest in several months.
Also mentioned in morning commentary was the fact that days like today often resign themselves to following technical levels and trends. If you haven't seen it already, take a look at the chart. The upper line was the scene of a solid bounce just before the domestic session got underway (2.544 in 10s). So far, that's as good a story today as any.
10's have since ebbed back toward the noncommittal safety of middle of that consolidating range and MBS have followed (or perhaps led... hard to say with this little to go on) the mild positivity. Fannie 3.5s are up 5 at 101-02 and 4.0s are up 4 at 103-30. To reiterate, there are no scheduled economic reports and no significant events on tap. Bond markets will try to make their way to the exits in orderly fashion, hoping not to be overly disrupted by any surprises in headlines or tradeflows.
Also mentioned in morning commentary was the fact that days like today often resign themselves to following technical levels and trends. If you haven't seen it already, take a look at the chart. The upper line was the scene of a solid bounce just before the domestic session got underway (2.544 in 10s). So far, that's as good a story today as any.
10's have since ebbed back toward the noncommittal safety of middle of that consolidating range and MBS have followed (or perhaps led... hard to say with this little to go on) the mild positivity. Fannie 3.5s are up 5 at 101-02 and 4.0s are up 4 at 103-30. To reiterate, there are no scheduled economic reports and no significant events on tap. Bond markets will try to make their way to the exits in orderly fashion, hoping not to be overly disrupted by any surprises in headlines or tradeflows.
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