Last Friday's jobs report sparked a reasonably big bond rally. In terms of 10yr yields it was one of the best days in weeks, if not months (depending on whether we're measuring from the previous close or the opening trade of any given day). This created a risk that traders would seize the gains as a sort of selling opportunity--especially with yields bouncing almost perfectly at the 1.56% technical level. While we did see a bit of weakness today, it was almost too small to count. That's a victory considering Friday's gains, but volume and volatility were so low that we arguably haven't seen a representative sample of traders show up for the week.
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Fed MBS Buying 10am, 1130am, 1pm
Modestly weaker at the start of overnight trading. Flat in Asia and a small amount of additional selling in Europe. 10yr up 2bps at 1.576 and 2.0 UMBS down an eighth, trading just under 101.00.
Sideways to slightly stronger with no drama for the past several hours. 2.0 UMBS are now down only 2 ticks (.06) and 10yr yields are up 1.2bps at 1.57%.
Slow and steady gains for MBS, now flirting with 'unchanged' levels in after hours trading. Treasuries hit the 3pm close roughly 1bp higher, which is a strong enough showing considering Friday's solid gains. Light volume and volatility all day.
MBS Market Alerts
