Locking vs Floating Ahead of Potentially Big Fed Announcement

First thing's first: if you haven't seen the adverse market fee make it back onto rate sheets yet, that makes locking a no-brainer.  If you have, then we can move on to considering the impact from the Fed Announcement.  Today's video discusses the relevant considerations in detail.

Econ Data / Events

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

  • NY Fed Manufacturing 17.0 vs 6.0 f'cast, 3.7 prev

  • Import Prices 0.9 vs 0.5 f'cast, 1.2 prev

  • Industrial Output 0.4 vs 1.0 f'cast, 3.5 prev

Market Movement Recap
08:26 AM

Bonds were unchanged to start the overnight session but lost ground modestly during European hours.  Stocks are up almost another 1%, but the bond weakness doesn't look too correlated with that.  10yr up half a bp at .68%.  UMBS 2.0 opening down 1 tick (-0.03) at 103-01 (103.03).

02:45 PM

Intensely uneventful trading session as bonds drift sideways ahead of tomorrow's Fed announcement.  No change from the last update in MBS.  Treasury yields are a hair lower but still slightly higher on the day.

03:48 PM

Stick a fork in the bond market.  If we didn't see any appreciable volatility at the 3pm CME close, "it's done" for the day.  All eyes on the Fed tomorrow, with a slight chance of some volatility with the morning's econ data (Retail Sales).