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MBS RECAP: Stronger Data Proves No Match For The Sideways Grind
May 21 2021, 4:08PM

Bonds have done a good job of clearing hurdles of various sizes over the past 2 weeks.  Last week's inflation data presented the biggest recent risk, but this week's Fed Minutes also raised some concerns.  This morning's example came courtesy of a much stronger Markit Services PMI reading, but it was no match for the well-entrenched range trade in longer term yields.  10yr Treasuries briefly hit their highs of the day, but then settled in to the same sideways-to-slightly-stronger pattern seen yesterday afternoon.

Econ Data / Events
  • Fed MBS Buying 10am, 1130am, 1pm

  • Markit PMIs:
       Services          70.1 vs 64.5 f'cast
       Manufacturing  61.5 vs 60.2 f'cast

  • Existing Sales 5.85m vs 6.09m f'cast

Market Movement Recap
08:36 AM

sideways to slightly stronger overnight.  Uneventful volume and volatility.  Modest gains in Europe with a bit of spillover helping US 10s start 1bp lower at 1.618.  UMBS 2.5 up 2 ticks (0.06) at 103-15 (103.47).

10:16 AM

Markit's Services PMI did some damage to bonds, pushing 10yr yields back up to overnight highs (+0.6bps at 1.634).  No major reaction to slightly weaker Existing Home Sales as the assumption is that it's driven by an inventory crunch.

02:31 PM

Low volume/volatility persists with Treasuries roughly unchanged and MBS just a shade stronger.  Several Fed speakers on the circuit, but nothing notable and new.

MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
UMBS 2.5
103-16 : +0-03
10 YR
1.6230 : -0.0110
Pricing as of 5/21/21 4:08PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
8:52AM  :  Sideways to Slightly Stronger Overnight

Economic Calendar
Time Event Period Actual Forecast Prior
Friday, May 21
9:45 PMI-Composite (source:Markit) * May 68.1 63.5
9:45 PMI-Services (Markit) * May 70.1 64.5 64.7
9:45 PMI-Manufacturing (Markit) * May 61.5 60.2 60.5
10:00 Exist. home sales % chg (%)* Apr -2.7 2.0 -3.7
10:00 Existing home sales (ml)* Apr 5.85 6.09 6.01

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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