MBS Live Recap: 2 Different Approaches Depending on Adverse Market Fee
Lock Decisions Still Hinge on Adverse Market Fee
Without any significant volatility in the bond market, mortgage rate strategy is still all about the return of the adverse market fee. In cases where it's already back, the outlook is more neutral, but still cautious ahead of next week's Fed announcement.
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20min of Fed 30yr UMBS Buying 10am, 1130am (M-F) and 1pm (T-Th)
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Consumer Price Index (CPI) 0.4 vs 0.3 f'cast
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Core Annual CPI 1.7 vs 1.6 f'cast
Bonds were flat to slightly weaker overnight but have rallied back to positive territory after this morning's CPI data. Looks like a few traders were on guard for higher inflation. Both MBS and Treasuries are just barely on the friendly side of 'unchanged.' Stock futures are up half a percent.
Volatility and movement in general have been relatively nonexistent today. MBS are 2 ticks (0.06) higher than they were this morning, but spent a vast majority of the day only 1 tick (0.03) higher. 10yr yields drifted gently lower and have been almost perfectly sideways around 0.67%.