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MBS RECAP: Do Today's Gains Mean The Selling Spree is Over?
Sep 30 2021, 4:11PM

After some initial weakness brought 10yr yields back in line with yesterday's highs, bonds managed to calm down enough eke out a small victory by the 3pm close. This is a welcome change in light of the recent selling spree, but that change had already occurred as of yesterday.  Today's mostly-sideways tone is better viewed as a confirmation of yesterday's leveling-off.  From here, the goal will be to determine whether this new consolidation is here to confirm recent weakness or to take up arms against it.  From a strategy standpoint, although there's a chance this means the selling spree is over, we'd still need to see a stronger move down and out of this week's range to confirm it.

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

  • Jobless Claims 362 vs 335 f'cast, 351 prev

  • Q2 Final GDP 6.6 vs 6.6 f'cast/prev

  • Chicago PMI 64.7 vs 65.0 f'cast, 66.8 prev

Market Movement Recap
08:37 AM

Inconsequentially stronger to start the overnight session, then weaker during European hours.  Yields up 1.5bps to 1.54% and MBS down almost an eighth--small scale moves in the recent context.

01:50 PM

Slow, steady gains throughout the day as the decompression of the recent selling spree coincides with a modest buying bias among month/quarter-end trading needs.  10yr now down 1bp at 1.515 and 2.5 MBS up nearly an eighth of a point.

03:59 PM

Uneventful afternoon with bonds showing no impressive evidence of month-end trading impacts.  Both 10yr yields and MBS remain at the same levels as the last update.


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
103-03 : +0-03
Treasuries
10 YR
1.5130 : -0.0260
Pricing as of 9/30/21 4:11PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
8:56AM  :  Inconsequentially Weaker Overnight; No Reaction to Data

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Matt Graham  :  "RE Loan Limit confusion: Pennymac led the charge on this by offering 625k (priced as HB) as their effective conforming loan limit. They can confidently do this because when new loan limits are announced at the end of November, they will safely be higher than 625k. New conforming loan limits are not yet known, secretly or otherwise. But we do know what 3 of the 4 quarters of home price data suggests about the new limits. The remaining quarter could be crap and we'll still hit 625k in our sleep."

Economic Calendar
Time Event Period Actual Forecast Prior
Thursday, Sep 30
8:30 GDP Final (%) Q2 6.7 6.6 6.6
8:30 Continued Claims (ml) w/e 2.802 2.800 2.845
8:30 Jobless Claims (k) w/e 362 335 351
9:45 Chicago PMI * Sep 64.7 65.0 66.8

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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Mortgage Rates:
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Recent Housing Data:
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