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MBS RECAP: No Whammies From Powell. Bonds Like It
Jun 22 2021, 5:05PM

Today's only notable calendar item was the congressional testimony from Fed Chair Powell.  He mainly stuck to the script, but elaborated a bit on a few topics (more details here).  For example, he was very clear about the Fed's high hopes for upcoming labor market data.  That means next week's jobs report would be hard-pressed to make the Fed interested in tapering any sooner.  Thus, the strong outlook is actually a feather in the bond market's cap.  

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

  • Existing Home Sales 5.8m vs 5.72m f'cast, 5.85m prev

Market Movement Recap
09:06 AM

Flat in Asia, stronger in Europe, then weaker heading into domestic hours.  Traders a bit cautious as auction cycle begins and ahead of Powell's afternoon speech.  Currently roughly unchanged after being more than 3bps lower (10yr yield) overnight. 

12:46 PM

Bonds found buyers just after the 9:30am NYSE open and gains accelerated as Fed's Williams offered some dovish comments at 10:30am.  10yr yields now down 2.5bps and UMBS 2.0 coupons are up nearly a quarter of a point.

03:41 PM

No whammies from Powell and a fairly bond-friendly approach (i.e. by putting months-long time frame on taper decision) are adding up to gains.  MBS up more than a quarter of a point and the 10yr is now down more than 3 bps.

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
103-08 : +0-07
10 YR
1.4670 : -0.0180
Pricing as of 6/22/21 5:05PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
3:50PM  :  At Best Levels After No Whammies From Powell
8:57AM  :  Modest Overnight Volatility. Now Unchanged

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matt Graham  :  "no whammies"
Matt Graham  :  "If major things are expected, then they become priced in to current levels. Powell had a press conference last Wednesday where the people asking questions were far more intelligent than who he'll be talking to today. So surprise potential is limited, but always a risk when Fed policy changes are in the cards in the near future."

Economic Calendar
Time Event Period Actual Forecast Prior
Tuesday, Jun 22
10:00 Existing home sales (ml)* May 5.80 5.72 5.85
10:00 Exist. home sales % chg (%)* May -0.9 2.0 -2.7
13:00 2-Yr Note Auction (bl) 60
14:37 Powell Congressional Testimony *

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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