MBS Live Recap: Surprisingly Strong Move For No Great Reason

While there were a few positive developments for bonds today, there were a few others to offset them.  The net effect should have been something a little closer to 'unchanged,' but the actual pace of gains was rather brisk.  10yr yields were down more than 4bps by the 3pm CME close and 2.5 UMBS were up more than an eighth of a point.

Econ Data / Events
  • Fed MBS Buying 10am, 1130am, 1pm

  • Case Shiller Home Prices (y/y)...13.3 vs 12.0 prev
    FHFA Home Prices (y/y) ...........13.9 vs 12.4 prev

  • Consumer Confidence...17.2 vs 119.2 f'cast
    Expectations................99.1 vs 107.9 prev
    Present Situation..........144.3 vs 131.9 prev

  • New Home Sales 863k vs 970k f'cast
    Last month revised down from 1.021m to 917k

Market Movement Recap
08:43 AM

Flat in Asia and modestly stronger in Europe in response to weak econ data.  10yr down 1bp and MBS up 1 tick (0.03).  No major news or data yet.

10:06 AM

Strong move (in context) right at the 9:30am NYSE open.  10yr now down 2.4bps at 1.579%.  2.5 UMBS up almost an eighth of a point.  Weaker 10am data not hurting, but not necessarily helping much.

01:53 PM

Gains extending slightly after strong 2yr Treasury auction.  It's rare to see spillover from 2yr to 10yr, but the 1pm timing is a bit too coincidental.  10s are down another bp, making it 3.9bps on the day at 1.564%.  UMBS 2.5s are up only an eighth.

03:11 PM

Bonds crossed the 3pm close at the best levels of the day (same as those seen in the last update).  No major movement since then.

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