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MBS RECAP: Intraday Weakness vs Bigger Picture Strength
Jul 20 2021, 3:24PM

There comes a time in the midst of an aggressive snowball rally (or sell-off) in the bond market where we're forced to consider the mortality of the short term trend.  As 10yr yields jumped up almost 10bps in a few short hours, today was that day for the current move.  Context is important though, and the weakness left Treasuries only slightly worse off than yesterday's close (MBS are still slightly stronger with a few hours to go).  Considering yesterday's closing levels represented an immense rally from the previous week, it's hard to say which side is making the more compelling point.  Bottom line, there's certainly reason for caution, but not necessarily strict orders to abandon hope.

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

  • Housing Starts 1.643m vs 1.590m f'cast, 1.546m prev
    Building Permits 1.598m vs 1.70m f'cast, 1.683m prev

  • Philly Fed Services Index 53.1 vs 59.6 prev

Market Movement Recap
08:58 AM

Roughly unchanged overnight, despite some 2-way volatility.  Better buying since the start of the domestic session with several instances of bigger buying shortly after the 8:30am data.  10yr down 5bps at 1.149% and UMBS 2.0 up almost a quarter point at 102-01 (102.03).

10:55 AM

Fairly sharp reversal which started slowly at the 9:30am NYSE open, but picked up steam after 10:40am.  10yr is now 'unchanged' on the day at 1.199 and UMBS 2.0 coupons, though still slightly positive, are a quarter point lower from intraday highs.

02:35 PM

After some additional weakness, bonds seem to have found their footing in the PM hours.  10yr is almost back down to 'unchanged' and MBS are back in line with levels from the last update (up slightly on the day, but down a quarter point from highs).


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
101-27 : +0-01
Treasuries
10 YR
1.2170 : +0.0360
Pricing as of 7/20/21 3:24PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
12:03PM  :  ALERT ISSUED: Negative Reprices Becoming Likely
10:45AM  :  ALERT ISSUED: Negative Reprice Risk Increasingly Slightly For Some Lenders
9:16AM  :  Bonds Improving Quickly After Data, But Not Necessarily Because of It

Economic Calendar
Time Event Period Actual Forecast Prior
Tuesday, Jul 20
0:00 Roll Date - Ginnie Mae 30YR
8:30 Build permits: change mm (%) Jun -5.1 -2.9
8:30 Housing starts number mm (ml) Jun 1.643 1.590 1.572
8:30 Building permits: number (ml) Jun 1.598 1.700 1.683
8:30 House starts mm: change (%) Jun 6.3 3.6

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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