Bonds began the day trading right in line with yesterday afternoon's higher yields (or lower prices). The first two hours saw a decent rally with trading levels nearly returning to yesterday's stronger range. A bounce in stocks just after 10am made things a bit tougher for bonds. Granted, stocks aren't the only game in town when it comes to inspiring the bond market, but bonds are content to take cues for range-bound volatility while they wait for Wednesday's Fed announcement. Treasuries experienced most of that volatility while 3.0 UMBS were especially calm and sideways from 10am on.
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Fed MBS Buying 10am, 11:30am, 1pm
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FHFA Home Prices Nov y/y.............. 17.5 vs 17.4 prev
Case Shiller Home Prices Nov y/y..... 18.8 vs 18.5 prev
Initially weaker in the overnight session with 10yr yields as high as 1.797. Better buying into the domestic session, now back down to 1.75%. MBS are 3 ticks higher (0.09) to start.
Gains into the 10am hour, then a bounce with stocks just after 10am. 10yr still down 1.4bps, but back up to 1.762%. MBS up only 2 ticks (0.06) on the day now.
Gains resuming after strong 5yr Treasury auction. 3.0 UMBS up 6 ticks (.19) at 100-02 (100.06). 10yr less responsive, but still slightly stronger, down 2.5bps on the day at 1.751.
MBS Market Alerts
