MBS RECAP: Give up hope, everyone who floats overnight
We are applying for approval to build our own Pirates of the Caribbean cruise at MBS Live headquarters. There will be more waterfalls and they will be sharper. Finally, we map the slope based on bond prices. We’ll even stick to some familiar elements like the “giving up hope” sign. That was certainly the message the bond market sent to today’s floaters. For more thoughts on movement, see the day ahead comment. See the Lock / Float section for specific thoughts on strategy.
Econ data / events
Fed MBS purchase 10 a.m., 11:30 a.m., 1 p.m.
Philly Fed 51.8 vs 23.0, 23.1 back
Unemployment claims 770k vs 700k f’cast, 725k prev
Market Movement Review
Bonds crushed into massive volume overnight. 10 year return up to 1.754 at highs, currently 1.74%. MBS from 3/8 point.
Very calm and sideways after the opening weakness. Nothing else to report than a modestly refreshing down-to-earth approach.
Today sets a kind of record for the most striking juxtaposition of overnight weakness and domestic session stability. Treasuries tried to rebound a little when stocks fell near the NYSE, but that didn’t last long. The returns are 7 + bps higher at 1.72%. MBS have remained unchanged since the last update and are only half a point weaker on this day.
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