MBS and Treasuries are at their weakest levels in 3 weeks ahead of this afternoon's FOMC Announcement. That's really all there is to it. We haven't had any meaningful market movers, and in fact, the only motivation has come from traders watching other traders. In that regard, "defensive" would be the best way to characterize the bigger trades we've seen.
There was an obvious glut of large trade activity from 9:11 to 9:17am in 5 and 10yr Treasuries. This took bonds to their weakest levels, but the volatility is completely insignificant compared to that seen 2 weeks ago, or that which might be on the horizon.
While we're technically into our weakest recent levels, it's nothing more than an incidental drift. For instance, Fannie 3.5s are down only 1/32nd on the day. There is no conviction here, just an unlucky break for morning rate sheets.
100-03 : -0-02
103-13 : -0-01
106-04 : -0-01
0.4380 : +0.0400
2.3190 : +0.0190
3.0840 : +0.0110
|Pricing as of 10/29/14 12:11PMEST|