April 13, 2021

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Mortgage News

Valiant Effort But This Week’s Bounce-Back Effort Falls Short

Fed Minutes Today at 2 p.m. EST

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MBS RECAP: Brave effort, but this week’s bounce-back effort falls short

To hit an insult, an injury? Oh, are you already known ?! Of course you are … It’s 2021 and we’re finally talking about the bond market. Just over 24 hours after bonds were supposed to maintain a friendly trend all week, we close near the week’s weakest levels and strongly disapprove of a break below 1.62% (a level that appears to be a good line in the sand for a stronger rally serves prospects). Most frustratingly, there are no obvious scapegoats for today’s price action – just a general 2-day trend starting from yesterday morning’s low yields.

Econ data / events

  • Fed MBS purchase 10 a.m., 11:30 a.m., 1 p.m.

  • Annual core PCE 1.4 vs 1.5 f’cast, 1.5 prev

  • Consumer sentiment 84.9 vs 83.6 f’cast, 83.0 prev

Market Movement Review

8:55 am

Bonds weaker overnight with losses focused on European hours (mostly stronger data). We could also call this a rejection of a break below 1.62% in 10-year returns. In both cases the losses are only “moderate” to date and we are still a long way from Monday’s highs of 1.70+ (currently 1.665%). MBS are less than an eighth. Minimal positive impact from PCE data (slightly weaker core inflation).

10:50 a.m.

Bonds push a little more against the weakness overnight, but progress remains slow. 10 years result in only 1.6 basis points at 1.65% and 2.5 UMBS only 1-2 ticks depending on the moment (-0.3 to -0.06).

12:41 p.m.

The morning rally ended shortly after 11 a.m. No specific reason. MBS corrected a little more abruptly than Treasuries, but both have stabilized in the past few minutes. UMBS 2.5s are only down 1 tick on the day and 10 year yields are only up 1.6 basis points at 1.65%.

5:03 p.m.

More sales … really stable all day, despite a short break from 10 a.m. to 12 p.m. Returns at daily highs. MBS prices at lows. No new specific motivation. Very linear 2-day trend. Apparently, bonds only stick to the script.


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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