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Month/Quarter-End Trading Refresher; More Stimulus Details
Today is the last day of the month and quarter. That means more for financial markets than it does for many other sectors. While there is no hard and fast rule concerning timing, there is historically increased trading activity at the end of month (and quarter) as various types of money managers rebalance their portfolios or adjust their holdings to match underlying benchmarks. Read more about the Treasury/MBS specific month/quarter-end considerations HERE. In other news, Biden is expected to speak at 4:20pm ET today with more details on the infrastructure plan. This is late enough in the trading day that it's more of a consideration for tomorrow (and even then, most of the details have already trickled out).
Econ Data / Events
Fed MBS Buying 10am, 1130am, 1pm
ADP Employment 517k vs 550k f'cast, 176k prev
Pending Home Sales -10.6 vs -2.6 f'cast (-0.5 y/y)
Market Movement Recap
08:23 AM Little-changed after ADP despite noticeable volume surge. Slightly weaker overnight. Currently up 1.3bps in 10yr at 1.723%. MBS are down 2 ticks (0.06).
12:15 PM Fairly quiet overall with modest gains heading into the end of the EU session (noon ET). MBS, specifically, improved just after the 10-10:20am Fed buying operation, which is interesting considering it was GNMA not UMBS. 2.5 UMBS are at the best levels of the day, up 3 ticks (.09) at 102-22 (102.69). 10yr yields are unchanged at 1.71.
01:51 PM Coming off better levels now. Heaviest volume of the day--assumed to be month/quarter-end tradeflows, but not a ton of volatility to show for it. 10yr yield up 2bps at 1.73% and UMNS 2.5 coupons now unchanged on the day (down 0.09 from the highs)
03:22 PM 3pm has come and gone without much 'month-end' fanfare. The weakness leading up to the 3pm close was already ramping up as of the last update, but yields did indeed top out right at 2:59pm ET. They're now back down to 1.73% again and UMBS 2.5 coupons are back to unchanged levels.
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MBS Commentary
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Month/Quarter-End Trading Refresher; More Stimulus Details
Today is the last day of the month and quarter. That means more for financial markets than it does for many other sectors. While there is... (read more) |
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Rob Chrisman
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What word becomes shorter when you add two letters to it? Short. (There’s the cutting-edge wit this commentary is known for!) Time can play tricks on us. Did you know that the fabled Studio 54 in Manhattan was only open from 1977 to 1980? Did y... (read more) |
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Mortgage Rate Watch
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There are a few interesting developments for mortgage rates today--especially in light of last week's striking discrepancy between Freddie's weekly survey and the reality on the front lines. Specifically, the Freddie survey finally did a bit more to ... (read more) |
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Housing News
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The S&P CoreLogic Case-Shiller home price indices and the Federal Housing Finance Agency's (FHFA's) House Price Index (HPI) all show that the growth of home prices continued to accelerate through January , even as interest rates began to creep hi... (read more) |
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Housing News
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Freddie Mac reported this week that its total mortgage portfolio increased at an annualized rate of 17.7 percent in February compared to a 16.1 percent gain in January. The portfolio balance at the end of the period was $2.818 trillion compared to $2... (read more) |
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Housing News
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The age of the U.S. housing stock is, to a certain extent, a reflection of the decline in new home construction since the onset of the housing crisis. However, Na Zhao, in a blog post in the National Association of Home Builders' (NAHB's) Eye on Hous... (read more) |
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