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MBS RECAP: Things Are Getting Ugly For Bonds
Jan 11 2021, 4:51PM

Earlier in the day, Treasuries looked to be selling off at a slower pace versus the past few trading sessions.  After sharp spikes in yields, this is the kind of pattern we tend to see before bonds find some support and undergo a friendly correction.  But just after the 9:30am NYSE open, Treasury yields hit more new long-term highs, thus re-setting our vigilant search for support.  To make matters worse, MBS underperformed (i.e. they had an even worse day than Treasuries) with both UMBS 1.5 and 2.0 coupons losing nearly 3/8ths of a point by the close.

Econ Data / Events
Market Movement Recap
08:34 AM

Treasuries were slightly stronger during the first part of the overnight session.  After a brief sell-off heading into domestic hours, yields just regained positive territory, down less than 1bp at 1.11%.  MBS are opening 1-2 ticks (.03-.06 weaker).  No econ data on tap (just 3yr Treasury auction and various Fed speakers).

01:12 PM

Bonds have weakened steadily since the more abrupt selling at the 9:30am NYSE open.  There are no specific market movers underlying the selling.  General pressure is coming from technicals/momentum, corporate bond issuance, and the Treasury auction cycle.

03:48 PM

The broader bond market remains sideways to slightly weaker at the highest levels since March.  MBS have been underperforming (still) and 2.0 coupons are now at the lowest prices since early August (1.5s weren't trading then).

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
102-24 : -0-11
10 YR
1.1460 : +0.0390
Pricing as of 1/11/21 4:49PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
3:19PM  :  ALERT ISSUED: Negative Reprices Becoming Likely
1:11PM  :  ALERT ISSUED: Negative Reprice Risk Increasing
9:42AM  :  ALERT ISSUED: Quick Trip to New Lows After NYSE Open
8:50AM  :  Roughly Unchanged After Calm Overnight Trading

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Dave Pressel  :  "I think this is nonsense. According to my borrower who currently has 4.750% he swears that rates should be at 1.750% on a 30 year"
Craig Griffin  :  "MG, you and the site are invaluable to my business. THANK YOU SO MUCH FOR ALL YOU DO FOR US!"

Economic Calendar
Time Event Period Actual Forecast Prior
Monday, Jan 11
13:00 3-Yr Note Auction (bl) 58
Tuesday, Jan 12
13:00 10-yr Note Auction (bl)* 38

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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