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MBS RECAP: Bonds Refuse to Answer The Big Questions Heading Into Mid-Week Holiday
Nov 10 2020, 5:01PM

After days like Monday (in which the bond market lost ground at the fastest pace in months due to the Pfizer vaccine news), we can see one of three things: a quick bounce back, a pause for reflection, or additional selling pressure.  Today's session offered mixed blessings.  Treasuries generally held under yesterday's same ceilings, but they certainly didn't rush to give an indication of a supportive bounce on the horizon.  Basically, we're in limbo, and there are reasons to be cautious and hopeful, though probably more of the former until further notice.

Econ Data / Events
Market Movement Recap
08:23 AM

Bonds started the overnight session in slightly stronger territory but began selling as soon as European markets opened for the day.  10yr yields are up 3bps to .954% and 2.0 UMBS are 1 tick weaker (-0.03) at 102-31 (102.97).  

12:19 PM

Slow, steady gains after AM weakness.  Both stocks and bonds improving (an interesting move for Treasuries heading into the 1pm 10yr auction).  10s are still up 2.5bps on the day though (.95%).  MBS are UP 3 ticks (.09) at 103-02 (103.06).

01:22 PM

Noticeable but moderate weakness after 10yr Treasury auction--mostly a factor for Treasuries, but MBS aren't immune.  10yr yields up 3.7 bps on the day at .961.  They were trading around .94% before the auction.  2.0 UMBS up 1 tick (0.03) on the day after being 3 ticks (.09) higher before the auction. 

04:57 PM

The late day sell-off fizzled out at 3pm, but not before MBS had lost enough ground for a few negative reprices.  10yr yields went no higher than the morning's highs (which in turn were no higher than yesterday's highs).  Nonetheless, there's a decidedly obvious trend of "higher lows" in yields that encourages us not to get our hopes up for a big bounce back just yet.

MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
UMBS 2.0
102-30 : -0-02
10 YR
0.9610 : +0.0030
Pricing as of 11/10/20 4:59PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
3:08PM  :  ALERT ISSUED: Negative Reprice Risk Increasing
2:52PM  :  ALERT ISSUED: Reprice Risk Considerations Ahead of a Market Holiday
1:10PM  :  10yr Auction Was Decent, But Not Great
8:31AM  :  Bonds Start Weaker; MBS Outperforming Post-Roll

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matt Graham  :  "TR, in other words, if I have a pool of 85k loans (full of borrowers with less refi incentive), that's worth breaking out into a separate specified pool because it's worth way more than TBA to an investor (the TBA is much more likely to suffer from high prepayment speeds)"
Joe Daquino  :  "Got mine in on time. Thanks MBSLive"

Economic Calendar
Time Event Period Actual Forecast Prior
Tuesday, Nov 10
13:00 10-yr Note Auction (bl)* 41
Wednesday, Nov 11
0:00 Veterans Day *

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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