August 5, 2021

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Mortgage News

MBS RECAP: New Week, New Weakness

Fed Minutes Today at 2 p.m. EST

Follow the markets live as the Fed Minutes release today at 2 p.m. EST.

It’s Fed Day. Are you ready?

If you followed the MBS comment, you know what This afternoon could be a big deal. Markets were prepare for it for weeks and MBS Live members have followed these movements every step of the way.

This afternoon, when markets are shaken just milliseconds after the Fed announcement, MBS Live members will know what’s going on before anyone else. The accuracy and speed of our real-time price streams and alerts is unmatched.

MBS RECAP: New week, new weakness

The new week wasted very little time reinforcing the realities of 2021. This is a rising interest rate environment for the time being, and any rapid correction to lower interest rates will require some serious motivation. This motivation could take several forms, and when we speak of a temporary and moderate correction, it could be as simple as passing Tradeflows from March to April (or Q1 to Q2). There are still a few days to go, and today was quickly overwhelmed by corporate bond issuance and additional sales related to the portfolio allocation for the end of the first quarter.

Market Movement Review

8:26 am

Modestly stronger during the first part of the overnight session. Quick but moderate selling pressure just before 4am, led by EU bonds. Treasuries gradually rebounded from previous gains and started the domestic session down 3 basis points at 1.643. 2.5 UMBS have risen by more than an eighth of a point.

11:07 am

Noticeable weakness at 9:30 am ET NYSE Open. 10 years now gives 2 basis points at 1.696. UMBS 2.5 coupons drop 1 tick (0.03) at 102-22 (102.69). Some rumors about the leaked internal White House proposal for $ 3 trillion in new spending and $ 1 trillion in tax hikes (although the latter is helping bonds).

1:35 p.m.

The returns for the day rose 3 basis points to 1.703%. Corporate bond issuance continues to grow during the week, adding to the pressure. With 2.5 coupons, MBS only surpassed 3 ticks (.09).

2:26 pm

More losses in the last hour as MBS is now more involved. Lowest daily prices for UMBS 2.5 (minus 6 ticks or .19). Traders cite corporate issues and portfolio reallocations as motivations.

4:16 pm

Modest recovery after 3pm but too little and too late to change the tone of the day. Even then, at 1.71%, 10-year yields are still up 3.6 basis points and 2.5 UMBS are still down nearly an eighth.

About the author

Operations manager,
Mortgage News Daily / MBS Live

Matthew, a former creator, started writing for Mortgage News Daily in 2007, covering a wide range of topics. When he saw a need in the marketplace, his focus increasingly shifted to the relationship between MBS and broader financial markets for lenders. …

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