Decent Day For MBS But Broader Trend Remains a Concern

Rates are low. Unless coronavirus wins (or looks like it might), rates should continue to gradually move higher, but not in a straight line.  Keep the underlying, gradual, uptrend in rates in mind on days where it seems like things are going well for bonds.  Those can be great days to lock in this environment.

Econ Data / Events

  • 11:30-11:50 AM (ET) - Fed 30yr UMBS Buying  

  • New Home Sales: 676k vs 640k f'cast, 580k prev (+16.6%)

Market Movement Recap
08:41 AM

Bonds rally and fade overnight on Navarro's China trade deal comments (and retraction).  Strong data in Europe fueled more weakness.  10yr starting out up nearly 2bps, but MBS are outperforming (trading just barely positive on the day).

11:37 AM

Stocks slid and bond yields improved modestly heading into the 9:30am NYSE open.  But both bounced simultaneously in the 10am hour.  10yr yields back up to .725 after being as low as .710.  UMBS 2.0 coupons on unchanged, down about 0.09 from the highs.

01:34 PM

Bonds bouncing back nicely after EU stock markets close.  MBS outperforming today (Treasury supply concerns).  Bond-friendly comments from PIMO regarding Fed's willingness to buy anything it takes to support markets.  Treasuries nearly unchanged, MBS up an eighth.  Positive reprice potential for aggressive lenders.

04:12 PM

No change in levels from the last update.  Gains definitely leveled off though and UMBS 2.0 seem uninterested in breaking above 102.