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MBS RECAP: Decent Recovery After a Rocky Start
Oct 18 2021, 4:21PM

Bonds sold off right at the start of the overnight session with yields nearly matching the recent overnight high from last Tuesday.  Losses continued into the domestic session.  Oil, inflation concerns, Fed rate hike expectations, technicals, and curve trading are/were all on the table as potentially contributing to the move.  Case in point on "curve trading," 30yr bond yields closed near their best levels in 3+ weeks while 5yr Treasury yields continued surging to their highest levels since before the pandemic.  This reflects Fed rate hike expectations (in turn a reflection of oil/inflation concerns) and the fact that the longer-term outlook takes a hit as the shorter-term challenges increase.

Econ Data / Events
Market Movement Recap
08:41 AM

Bonds weaker from the start of the overnight session.  Extremely high volume.  10yr up 4+ bps at 1.616% and 2.5 UMBS down nearly a quarter point. 

10:33 AM

Nice push back over the past half hour with MBS now within 1 tick of 'unchanged' and 10yr yields only 1bp higher at 1.584%.

03:05 PM

Bonds lost some ground into the 1pm hour, but rallied back to the day's better levels heading into the 2pm hour.  Right in line with 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
102-16 : -0-02
Treasuries
10 YR
1.5890 : +0.0130
Pricing as of 10/18/21 4:21PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
8:55AM  :  ALERT ISSUED: Heavy Selling in Heavy Volume Overnight

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Ira Selwin  :  "https://www.fhfa.gov/Media/PublicAffairs/Pages/FHF... ...." both Enterprises will incorporate desktop appraisals into their Selling Guides for many new purchase loans starting in early 2022. The use of desktop appraisals by the Enterprises was one of several temporary flexibilities initiated last year in response to the COVID-19 pandemic. This decision is the result of a thorough review of data collected from use of the loan flexibilities, as well as input received from the Request for Input (RFI) and public listening session on appraisal-related policies, practices, and processes.""

Economic Calendar
Time Event Period Actual Forecast Prior
Monday, Oct 18
9:15 Industrial Production (%) Sep -1.3 0.2 0.4
10:00 NAHB housing market indx Oct 80 76 76
Tuesday, Oct 19
8:30 Housing starts number mm (ml) Sep 1.620 1.615
8:30 House starts mm: change (%) Sep 3.9
8:30 Build permits: change mm (%) Sep 5.6
8:30 Building permits: number (ml) Sep 1.680 1.721

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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More From MND

Mortgage Rates:
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  • 15 Yr FRM 2.59%
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  • Jumbo 30 Year Fixed 3.15%
MBS Prices:
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  • 30YR FNMA 5.0 108-31 (-0-01)
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  • 30YR FNMA 5.5 109-07 (-1-07)
Recent Housing Data:
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  • Purchase Index 1.82%