3-Day Weekend for Volatility; Waiting on Supply
After Friday's bond market rout, today's relatively calm trading data stood in stark contrast. On one hand, it's nice not to see losses accelerate further. On the other hand, it would have been nice to see Friday afternoon's rally extend into the new week. As it stands, traders may be waiting to see how this week's bond market supply is digested, both in terms of Treasury auctions and the general glut of corporate bond supply. Losses were minimal--especially in MBS where 2.5 coupons remained above Friday's pre-NFP levels.
Fed MBS Buying 10am, 1130am, 1pm
Slightly weaker overnight. If stimulus deal passage is having any effect, it's barely noticeable. There was short-covering on Friday after the jobs report (bond buying for the purpose of closing short positions) and today's losses undo a logical amount of that strength. 10yr is back up to 1.60% versus Friday's 3pm close of 1.556%. MBS are less than an eighth of a point lower
Flat all morning in MBS while Treasuries have been edging back up toward overnight high yields. No major market movers in play. Heavy corporate bond issuance is weighing on Treasuries in general. 10yr up 2.6bps at 1.6%. UMBS 2.5 down 3 ticks (.09) at 103-13 (103.41).
Extremely calm trading session to start the new week. 10s are going out right where they came in. 2.5 UMBS are unchanged from the last update. No obvious market movers and clearly no market movement.