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MBS RECAP: MBS Only Slightly Better While 10yr Shines
Jun 18 2021, 3:52PM

As discussed in the day ahead, the bond market is in the midst of repricing its assumptions about the yield curve after Wednesday's Fed forecasts.  Rate hike size and timing is being given just a bit more respect, and previous trades betting on a steeper yield curve are quickly covering.  That translates to losses in 2-3yr bonds and gains in the longer end of the yield curve.  Bottom line: longer-lasting bonds are doing the best.  MBS don't last as long as 10yr Treasuries so they're not doing as well.  The end.

Econ Data / Events
Market Movement Recap
08:52 AM

Stronger overnight with 10yr revisiting yesterday's lowest yields around 4am.  Weaker at the start of the domestic session (back to unchanged) after Bullard comments on CNBC.

11:04 AM

Wild morning, relatively, with  big dip in MBS followed by an even bigger recovery.  TSY yield curve going nuts with 2s in the toilet and 30s to the moon.  See the Day Ahead for more.  There are no obvious catalysts for the 10am rally in the long-end of the yield curve.

03:15 PM

Slow grind toward stronger levels over the past 4 hours (just as easy to call MBS "sideways").  2.5 coupons are up 2 ticks (0.06) on the day and 10yr yields are near their lows of the day down 6.8bps at 1.443%.  


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 2.5
103-04 : +0-02
Treasuries
10 YR
1.4410 : -0.0700
Pricing as of 6/18/21 3:52PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
10:42AM  :  Big Reversal; Back to 'Unchanged' in MBS
10:03AM  :  ALERT ISSUED: MBS Losing Some Ground; Reprice Risk Increasing
8:49AM  :  Bonds Lose Ground Following Bullard Comments

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matt Graham  :  "RTRS - EXCLUSIVE-KASHKARI SAYS INFLATION READINGS HAVE BEEN HIGHER THAN EXPECTED BUT SHOULD BE SHORT-LIVED"
Matt Graham  :  "RTRS - EXCLUSIVE-KASHKARI: FED'S INTEREST RATE 'DOT PLOT' HAS GIVEN TOO-HAWKISH GUIDANCE IN PAST, IN FAVOR OF KILLING IT"

Economic Calendar
Time Event Period Actual Forecast Prior
Tuesday, Jun 22
10:00 Existing home sales (ml)* May 5.72 5.85
10:00 Exist. home sales % chg (%)* May 2.0 -2.7
Wednesday, Jun 23
7:00 MBA Purchase Index w/e 266.3
7:00 MBA Refi Index w/e 3026.6
9:45 PMI-Composite (source:Markit) * Jun 68.7
10:00 New Home Sales (ml) May 0.875 0.863
10:00 New Home Sales (%) (%)* May -5.9
13:00 5-Yr Note Auction (bl)* 61
Thursday, Jun 24
8:30 GDP Final (%) Q1 6.4 6.4
8:30 Core CapEx (%)* May 0.8 2.2
8:30 Durable goods (%)* May 2.7 -1.3
13:00 7-Yr Note Auction (bl)* 62
Friday, Jun 25
8:30 Core PCE Inflation (y/y) (%)* May 3.4 3.1
10:00 Sentiment: 5y Inflation (%) Jun 2.8
10:00 Sentiment: 1y Inflation (%) Jun 4.0
10:00 Consumer Sentiment (ip) Jun 86.5 86.4

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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