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MBS RECAP: Uneventful Month-End Day For Bonds, But MBS Outperform
Nov 30 2020, 4:19PM

Final trial results for Moderna's vaccine (it's still really good, by the way) failed to produce a huge reaction in markets overnight, but it did coincide with higher Treasury yields to start the day.  As bonds recovered, MBS outperformed--at first, by a little.   Then, by a lot.  Month-end trading motivations were the only game in town when it came to assigning blame for all of the micro movement.  The Fed's MBS buying operation from 1pm-120pm was clearly the motivation for the final surge in MBS in the afternoon.

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

  • Chicago PMI 58.2 vs 59.0 f'cast, 61.1 prev

  • Pending Home Sales -1.1 vs +1.0 f'cast, -2.0 prev

Market Movement Recap
08:54 AM

Stocks and bond yields moved lower during Asian hours but bounced in Europe.  Moderna's final trial results added to stock optimism and bond weakness, but only modestly.  Bonds are still fairly close to Friday's latest levels with 10yr yields up 1bp at .852 and 1.5 UMBS nearly unchanged at 101.

01:24 PM

Bonds have been rallying modestly all morning with 10yr yields just turning positive on the day.  MBS have been outperforming and 1.5 coupons are now up an eighth of a point.  Chalk this up to a supportive reaction from buyers after "fast money" traders sold bonds early this morning on Moderna's final vaccine trial news.  There was also a modicum of month-end buying for traders that didn't get their fill last week.

04:06 PM

Strong gains for MBS (on top of Friday's strong gains), despite Treasuries being flat to slightly weaker.  Trading was uneventful in the bigger picture, driven mainly by month-end positioning.  MBS drew strength from Fed buying operations with the most noticeable pop following the final installment at 1-120pm ET.


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
103-29 : +0-05
Treasuries
10 YR
0.8450 : +0.0030
Pricing as of 11/30/20 4:17PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
8:54AM  :  Bonds Open Slightly Weaker; Moderna Vaccine Optimism

Economic Calendar
Time Event Period Actual Forecast Prior
Monday, Nov 30
9:45 Chicago PMI * Nov 58.2 59.0 61.1
10:00 Pending Sales Index Oct 128.9 130.0
10:00 Pending Home Sales (%) Oct -1.1 1.0 -2.2
Tuesday, Dec 01
10:00 Construction spending (%) Oct 0.8 0.3
10:00 ISM Manufacturing PMI * Nov 58.0 59.3

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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