MBS Live Recap: Month-End No Help For Longer-Term Rates

Today brought rather pervasive pressure on longer-term rates and mortgages.  It wasn't a significant amount of selling, but it was fairly steady throughout the day--ultimately bringing us back into the red after starting the day in the green.

Credit Europe for the green start.  To a smaller extent, stock losses may have played a role.  As domestic traders got started for the day, everything reversed course.  Stocks gained.  Bonds lost.  Economic data was either uneventful or overlooked.

The only noticeable theme in bond markets was a "steepening" bias.  In other words, traders were willing to sell 10yr Treasuries much more readily than 2yr Treasuries.  Indeed, 2s stayed green (and never really sold off) while 10s were up nearly 1bp by the close after beginning the day nearly 3bps lower.

In the bigger picture, that leaves us right in line with post-Fed levels, and without any post-Fed follow through.  This could be the markets way of saying it would need to see more evidence for a rally from next week's big-ticket economic reports, including Friday's jobs data (and the Average Hourly Earnings component that hurt rates so badly at the beginning of September).