Bond markets overall have seen a fair share of ups and downs today, albeit in a narrow range. But where Treasuries took 2 steps back, MBS usually only took 1. Where Treasuries took a step forward, MBS usually took 2. Thus we find ourselves near the end of the day with MBS in positive territory vs Friday's latest levels while Treasuries remain in the red.
That's not a typical scenario unless both sides of the market are fairly close to unchanged and today is no exception. While it's nice to say MBS are at their best levels of the day, the outright improvement stands at 2/32nds in both Fannie 3.5s and 4.0s. As for 10yr yield weakness, they're up a modest .012% at 2.746.
Inspiration was every bit as limited as it has been of late. To whatever extent equities markets offered cues for bond markets, it was a great day for us! Case in point, S&Ps were up over 20 points at times which is the sort of gain that's usually associated with a bigger loss in Treasuries (assuming the stocks and bond yields are moving in the same direction in general).
There are several considerations in the coming days regarding potential market movers, but the default theme remains one of indecision and confusion. We won't know what changes that until after it arrives. Between now and then, movement is limited and generally focused on long-term central pivot points (i.e. 10yr yields swirling around 2.75-ish and Fannie 4.0 MBS just over 104-00.
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