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MBS RECAP: Lock Decisions Still Hinge on Adverse Market Fee
Sep 10 2020, 4:55PM

The bond market had a decent showing today, ultimately rallying back into positive territory after a weaker start.  We could agonize over what amounts to extremely small volatility inside a sideways range or simply lock anything we can before the adverse market fee returns.  In cases where it's already back, the outlook is more neutral, but still cautious ahead of next week's Fed announcement.

Econ Data / Events
  • 20min of Fed 30yr UMBS Buying 10am, 1130am (M-F) and 1pm (T-Th)

  • Jobless Claims 884k vs 846k f'cast, 884k prev

  • Producer Prices (core, annual) 0.6 vs 0.3 f'cast, 0.3 prev

Market Movement Recap
08:12 AM

Treasuries rallied in the first half of the overnight session. Brexit-related headlines and anticipation for a reflationary tone in the ECB  Announcement pulled EU yields higher overnight.  US yields followed, bringing them back to slightly higher levels (up less than 1bp).  2.0 UMBS are down 1 tick (-0.03). 

12:57 PM

MBS-specific rally following Fed buying operation.  Sellers brought light supply... very light.  Treasury rally isn't hurting, but it's not the mover.  30yr bond auction up next.

01:03 PM

Decent 30yr bond auction, especially with minimal weakness in advance.  Yields came in right in line with the pre-auction expectations.  Bid-to-cover was slightly lower than average.  Yields are moving lower in response, but not aggressively. 

04:46 PM

Most of the post-auction gains are intact heading into the close.  Stock market weakness found a way back into the spotlight with heavy selling after 2pm.  Bonds had a head start thanks to a good auction response at 1pm.  MBS are 2 ticks higher (+0.06) and 10yr yields are 1.6bps lower.


MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
MBS
UMBS 2.0
103-08 : +0-02
Treasuries
10 YR
0.6804 : -0.0226
Pricing as of 9/10/20 4:52PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
12:56PM  :  MBS Prices Squeezed Higher By Light Supply in Fed Operation
8:41AM  :  Bonds Lose a Bit More Ground After Data and ECB

Economic Calendar
Time Event Period Actual Forecast Prior
Thursday, Sep 10
8:30 Core Producer Prices YY (%)* Aug 0.6 0.3 0.3
8:30 Jobless Claims (k) w/e 884 846 881
10:00 Wholesale inventories mm (%) Jul -0.3 -0.1 -0.1
Friday, Sep 11
8:30 Core CPI (Annual) (%)* Aug 1.6 1.6

About the Author

Chief Operating Officer, Mortgage News Daily / MBS Live
A former originator, Matthew began writing for Mortgage News Daily in 2007, covering a wide range of topics. Seeing a need in the marketplace, his focus increasingly shifted toward relating MBS and broader financial markets for loan originators. ... more

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