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MBS RECAP: Bonds Sell Rumor, Buy New on Inconsequential Fed Minutes
Aug 18 2021, 4:31PM

A lot has happened in the past 3 months--especially when it comes to the variables that could impact Fed policy going forward.  This made any massive reaction to today's Fed Minutes a long shot, but it's always good to be prepared for some volatility when it comes to the Fed.  Traders prepared by selling bonds ahead of the 2pm release.  When the minutes proved to be every bit as docile as they might have been, there was a quick shuffle back into yesterday afternoon's trading range and that was that.

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

  • Housing Starts 1.534m vs 1.600m f'cast, 1.643m prev
    Building Permits 1.635m vs 1.610m f'cast, 1.594m prev

Market Movement Recap
09:00 AM

Slightly weaker overnight as Asian shares rallied.  EU session was more supportive.  10yr started roughly 1bp higher and remains there (1.277).  UMBS 2.0 down less than an eighth.

01:57 PM

Bonds losing ground heading into Fed minutes.  MBS just over an eighth of a point weaker from intraday highs.  10yr up 2.6bps at 1.293%.  Slow, steady, linear grind all morning with a bit of extra defensiveness in the past 30 minutes.

02:42 PM

2-way street after Fed Minutes, but it seems to be resolving with moderate gains.  This brings 10yr yields back within 1bp of 'unchanged' and MBS prices up 5bps (2 ticks) on the day.

04:14 PM

Stick a fork in today's session.  It's done.  Levels may drift a bit higher or lower (currently unchanged vs the previous update), but the takeaway is that the Fed Minutes were inconsequential.  


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
101-11 : +0-03
Treasuries
10 YR
1.2600 : +0.0020
Pricing as of 8/18/21 4:32PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
2:35PM  :  Ultra Condensed Fed Minutes Bullet Points
2:07PM  :  No Whammies in Fed Minutes Judging by Fed Minutes Reaction
1:26PM  :  ALERT ISSUED: At Weakest Levels; Reprice Risk Increasing
9:00AM  :  Slightly Weaker Overnight. No Reaction to Data

Economic Calendar
Time Event Period Actual Forecast Prior
Wednesday, Aug 18
0:00 Roll Date - Ginnie Mae 30YR
7:00 MBA Purchase Index w/e 249.9 252.0
7:00 MBA Refi Index w/e 3490.2 3684.3
8:30 House starts mm: change (%) Jul -7.0 6.3
8:30 Housing starts number mm (ml) Jul 1.534 1.600 1.643
8:30 Building permits: number (ml) Jul 1.635 1.610 1.594
8:30 Build permits: change mm (%) Jul 2.6 -5.3
13:00 20yr Treasury Auction *
14:00 FOMC Minutes *

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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