Decent Day Helps Legitimize Friday's Gains

Any time we see a strong move on NFP Friday with a hint of "snowball buying," it's worth considering that momentum at the end of the week is getting a bit carried away.  At the very least, in those scenarios, we wouldn't be surprised to see a bit of push back at the beginning of the following week.  Today was that beginning, and while there was arguably a small amount of push-back in the overnight session, it was quickly erased, and with minimal volatility to boot.  This helps legitimize the levels achieved last Friday--especially with Treasury auctions on deck and another high risk event in the form of the CPI data on Thursday.

Econ Data / Events
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Market Movement Recap
08:48 AM

Mostly holding Friday's gains with 10yr yields up less than 2 bps at 3.578 and MBS down only 1 tick (0.03)

11:10 AM

Additional gains heading into the 11am hour with some help from a NY Fed survey release showing lower inflation and spending expectations.  10yr down 2.2 bps at 3.538 and MBS up 2 ticks (.06).

01:43 PM

Very flat since late AM gains.  MBS up an eighth and 10yr down 3.2bps at 3.528.

03:21 PM

Yields unable to break much below 3.51%, but not looking panicked.  Currently still down 3bps at 3.53%.  MBS down 2 ticks (.06) as indicated, but illiquidity accounts for at least an eighth of a point of the apparent weakness. 

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