http://www.mortgagenewsdaily.com/topic/mbs Mortgage Rates Blog https://www.mortgagenewsdaily.com/markets/mbs-recap-10092026 Fri, 09 Oct 2026 20:38:59 GMT 6ac95fa81d0f9c937d52eb4b Matthew Graham Another Nice Round Trip For Bonds--Especially MBS Nothing new or interesting happened today in terms of underlying events, news, or data. But the price action itself was a different story. While the moves weren't extreme, it was nonetheless notable that bonds lost ground in a very intentional way this morning only to reverse course and make it back to positive territory by the close. Yields are still broadly sideways at long-term highs, but we now have a second straight day having closed near the week's best levels. MBS outperformed Treasuries a bit, and officially turned green by the afternoon even as 10yr yields were a hair higher. It's all somewhat promising, but not conclusive evidence of "more to come." The 3-day weekend may be adding some distortion. Either way next week's data may play a big role in making this week look like a false start or sneak preview.   Market Movement Recap 12:47 PM Weaker morning, but bouncing back since 11am. MBS now down only 2 ticks (.06) and 10yr up only 1.4bps at 5.244 Mortgage News Daily 0 http://www.mortgagenewsdaily.com/rss/mbs https://www.mortgagenewsdaily.com/markets/mbs-morning-10092026 Fri, 09 Oct 2026 13:50:08 GMT 6ac8ff901d0f9c937d522d25 Matthew Graham After yesterday's nice comeback, here's how we're thinking about today. Fridays before 3-day weekends: frequently see a move to the sidelines among certain investors. Traders who were tactically long bonds over the past 2 days could be booking profit. Translation: some of the strength over the past 2 days could turn to weakness for purely mechanical reasons.  frequently see less determination to aggressively pursue new trading ideas in the absence of compelling econ data.  often "don't count" when it comes to forming our view of prevailing short term trends. Bonds are starting out slightly weaker, but MBS are right in line with Wednesday's close. Treasuries are even better than Wed's close.  It would be a victory to close around these levels today. Any improvement is a bonus. And deterioration can be forgiven, as long as it doesn't get out of hand. Mortgage News Daily 0 http://www.mortgagenewsdaily.com/rss/mbs https://www.mortgagenewsdaily.com/markets/mbs-recap-10082026 Thu, 08 Oct 2026 20:16:53 GMT 6ac8084c1d0f9c937d50704e Matthew Graham Yields "Plummet" to Best Level In... 4 trading days...  All the way back on October 2nd (last Friday), intraday lows were 5.151%. In other words, today's rally was definitely nice and definitely worth discussing, but if we're witnessing the inception of anything legitimately exciting here, it's in an embryonic stage as of today. 10yr yields would need to be below 5.0% just over a month from now to confirm a truly big shift. As for drivers, we'd have a hard time reconciling today's friendly reversal without giving some credit to investors "buying the dip" in bond prices (or the supportive ceiling in yields around 5.33-5.35). Additional mid-day gains followed war headlines and a decently strong 30yr bond auction. No major data tomorrow.  Market Movement Recap 01:04 PM Mid-day gains after war-related headlines. Ho-hum Treasury auction, but it would have been strong if not for the rally leading up to it. 10yr at best levels, down 5 bps at 5.622.  MBS up nearly a quarter point.  Mortgage News Daily 0 http://www.mortgagenewsdaily.com/rss/mbs https://www.mortgagenewsdaily.com/markets/mbs-morning-10082026 Thu, 08 Oct 2026 13:36:44 GMT 6ac7aa8c1d0f9c937d4fb79c Matthew Graham Bonds were initially moderately weaker this morning morning in a move that followed oil prices and hawkish Fed comments. Chris Waller said more hikes were needed due to a strong economy, persistently high inflation, and the risk that inflation expectations would become unanchored after 5.5 years above target. This hit the short end of the curve at 4:30am ET and brought Fed Funds Futures for the middle of next year back to yesterday's levels. Oil prices were rising at the same time and were already pushing bonds higher (or the correlation is coincidental, and bonds just "felt like" correcting a bit).  In the last few minutes, 10yr yields made it all the way back to unchanged for reasons unknown, although someone will try to tell you it had to do with Europe and the ongoing bond market volatility there. They're wrong in this case even though Europe has been a factor on several recent occasions. Now it's time to play "name that line." The following chart has 3 lines. One is the 10yr yield. One is oil. One is the implied yield for Fed Funds Rate in June 2027. See if you can guess which is which.  Well, nevermind. It doesn't really matter, right?  Seriously though, the "Waller" caption gives it away. The orange line has to be Fed Funds Futures because it's not nearly as active as the other two (if you didn't already know, there are far fewer trades in Fed Funds Futures than in bonds or oil). The blue line therefore has to be 10yr yields.  Well, it doesn't HAVE TO be, but it's much more likely to be because it moves with Fed Funds Futures whereas the red line does not (i.e. Fed rate outlook is more likely to correlate with the rest of the bond market than with oil prices).  Mortgage News Daily 0 http://www.mortgagenewsdaily.com/rss/mbs https://www.mortgagenewsdaily.com/markets/mbs-recap-10072026 Wed, 07 Oct 2026 20:56:51 GMT 6ac6c02d1d0f9c937d4e0f3f Matthew Graham Full Recovery! The patient looked critical this morning with 10yr yields pushing up to new long-term highs just over 5.36%, but by the early afternoon, there was a full recovery. In fact, most of the recovery arrived after 9:30am ET (and before 11am ET). Any time 9:30am kicks off a big move, we think about things like ETF tradeflows and other money shuffling in the retail investor space. Oil prices also moved lower at that time, but not enough to justify the swings seen in the bond market. The afternoon's 10yr Treasury auction was well-received (as they often are when yields tag long-term highs). The follow-through helped complete the round trip, ultimately leaving yields about 1bp lower by 3pm ET and MBS a few bps higher. Market Movement Recap 10:28 AM Sharply weaker overnight, but recovering a bit now. MBS down about a quarter point and 10yr up 3.6bps at 5.32 01:03 PM Additional recovery after strong 10yr auction. 10yr now up less than 1bp on the day at 5.289 and MBS down only 2 ticks (.06). Mortgage News Daily 0 http://www.mortgagenewsdaily.com/rss/mbs https://www.mortgagenewsdaily.com/markets/mbs-morning-10072026 Wed, 07 Oct 2026 14:07:32 GMT 6ac661401d0f9c937d4d50aa Matthew Graham If there's been a safe bet to make on isolated rally days over the past 2 months, it's that they'll be soon followed by a return to the prevailing trend toward higher rates. Today fills that role with gusto. We hate gusto--this kind anyway. Unfortunately, this kind of gusto is all we have, and there's no convenient, singular explanation even though many will try to tell you there is. We can tell you that it's not oil, Europe, auctions, war headlines, corporate issuance, fiscal concerns, strong economy, or foreign demand. But at any given point in the uptrend, several of these things may be in play (other than "auction concerns"... that's just something someone says on auction day when they don't know why yields are higher).  Let's pick something to make fun of. The top pick would have to be "auction concerns," but there's no fun way to put that on a chart, so let's use "Treasuries are worried about France."  If someone tells you that today, ask them to clarify whether it's higher or lower French yields that are good/bad for US yields, because all 4 combinations have been argued in the past week: Mortgage News Daily 0 http://www.mortgagenewsdaily.com/rss/mbs https://www.mortgagenewsdaily.com/markets/mbs-recap-10062026 Tue, 06 Oct 2026 20:02:06 GMT 6ac562f41d0f9c937d4b880b Matthew Graham Today Was "Nice" For Bonds Bonds bucked their prevailing trend and managed to move slightly lower in yield today. Unlike yesterday's session which had no clear correlation with underlying events, today's move traced a drop in oil prices fairly clearly. Some analysts thought that an improvement in French government bonds may have been mildly encouraging as well, but that would require drawing the opposite conclusions from last week's narrative about French bond turmoil benefiting the U.S. as a safer haven. In any event, the rally was too small to merit that much thought. Yields encountered resistance at 5.26%, but could also be broadly finding buying support when yields crest 5.3%. Bottom line, today was "nice," but in and of itself, not enough to suggest a meaningful shift in momentum.  Market Movement Recap 02:57 PM Near best levels. MBS up over a quarter point and 10yr down 3.8bps at 5.269 Mortgage News Daily 0 http://www.mortgagenewsdaily.com/rss/mbs https://www.mortgagenewsdaily.com/markets/mbs-morning-10062026 Tue, 06 Oct 2026 14:00:02 GMT 6ac50d681d0f9c937d4add76 Matthew Graham If rate movement were a car, it's been driving pretty recklessly recently, and definitely not keeping good pace with other motorists. But every now and then, we see a break in the craziness. The overnight trading session provided an example. The bond car set its adaptive cruise control to follow the car in front of it (oil prices, in today's case). That's left us just a bit stronger to start, but it's not an inspiring reversal so much as a coincidental mini-correction.  10yr yields unfortunately seem to be hitting resistance at 5.26%, but oil bounced at the same time, and we're not really in love with technicals these days. This afternoon's 3yr Treasury auction has a small chance of being mildly interesting (emphasis on small/mild).  Mortgage News Daily 0 http://www.mortgagenewsdaily.com/rss/mbs https://www.mortgagenewsdaily.com/markets/mbs-recap-10052026 Mon, 05 Oct 2026 20:41:48 GMT 6ac419a81d0f9c937d492442 Matthew Graham What Will it Take For Bonds to Recover? Another day, another sell-off without any satisfying explanations. To be fair, you could say bonds just traded the curve today with anything 3yrs or shorter rallying at the expense of the longer end of the curve. But for the mortgage market, <3yrs is too short-term to matter. Data and headlines did not line up well at all with the weakness, so take your pick from the general themes we've added to the daily lock/float considerations. At some point, yields will have moved high enough to motivate investors to buy bonds for investment purpose (as opposed to tactical or compulsory trading purposes). Until then, the trend is not your friend.  Econ Data / Events ISM Biz Activity (Sep) 56.5 vs -- f'cast, 61.7 prev ISM N-Mfg PMI (Sep) 54.9 vs 55 f'cast, 55.4 prev ISM Services Employment (Sep) 50.1 vs -- f'cast, 47.8 prev ISM Services New Orders (Sep) 59.8 vs -- f'cast, 60.9 prev ISM Services Prices (Sep) 74.0 vs -- f'cast, 72.6 prev Market Movement Recap 10:07 AM Modestly weaker at the open, but holding ground after ISM. 10yr up 1.7bps at 5.296. MBS down 1 tick (.03). 12:51 PM weakest levels. no new reasons. MBS down 10 ticks (.31) and 10yr up 5.5bps at 5.334 04:01 PM Off the weakest levels, but again, not for any particular reason. MBS down a quarter point and 10yr up 3bps at 5.309 Mortgage News Daily 0 http://www.mortgagenewsdaily.com/rss/mbs https://www.mortgagenewsdaily.com/markets/mbs-morning-10052026 Mon, 05 Oct 2026 14:46:08 GMT 6ac3c6741d0f9c937d487f71 Matthew Graham Another week begins with the frustrating reality of the bond market selling just because there's no reason to buy. To be fair, 2yr yields are unchanged, but longer-dated yields are several bps higher than Friday afternoon. All this despite oil prices being lower and econ data being in line with expectations. At this point, anyone offering rationale for the movement is forced to craft a narrative that fits that movement. In other words, if yields were plummeting, the average bond analyst wouldn't be harping on a laundry list of reasons that bonds are making the incorrect move. Mortgage News Daily 0 http://www.mortgagenewsdaily.com/rss/mbs