Rates Are Reconnecting With Bond Market Movement

After last week's LLPA news, lenders pulled back pricing for obvious reasons and only gradually lowered their defenses.  As of today, we are finally seeing that process level-off, which means any major movement in bonds should more readily translate to rates in the days ahead.  Markets will likely hear things they already know from the Fed tomorrow as bonds keep trying to confirm a near-term ceiling at 0.73% in 10yr yields.

Econ Data / Events

  • 20min of Fed 30yr UMBS Buying 10am, 1130am (M-F) and 1pm (T-Th)

  • Housing Starts 1.496m vs 1.24m f'cast, 1.22m prev

  • Building Permits 1.495m vs 1.320m f'cast, 1.258m prev

Market Movement Recap
07:56 AM

Bonds began the overnight session modestly stronger despite stock futures doing the same.  Yields and stocks fell into the 3am hour before bouncing higher.  Treasury yields are still lower versus yesterday, but stocks are inching closer to all-time highs (S&P).  MBS are starting the day up 3 ticks (0.09).

03:07 PM

Bonds rallied into the afternoon with both MBS and Treasuries hitting their best levels between 1230-130pm ET.  Both remain in positive territory, but have pulled back a bit since then.  Not much is being cited as motivational for bond traders today apart from positioning ahead of tomorrow's Fed Minutes.