MBS Outperform as Treasuries Give Back Some of Last Week's Gains

After rallying from roughly 4.45 to 4.22% last week, 10yr Treasuries began the new week with a move up 4.28%.  MBS didn't lose ground as quickly today, which is what you'd expect after they underperformed for a week as Treasuries rallied somewhat sharply.  It was a boring day in terms of data, events, and volume.  NY Fed Manufacturing didn't have a discernible impact and traders were unsurprised by updates from Fed's Harker.  The losses feel like a token correction with effectively no bearing on tomorrow's directionality.  That majority of that honor goes to Retail Sales, or at least all rights are reserved by Retail Sales.  It would still take a big beat or miss to prompt a logical and meaningful reaction. 

Econ Data / Events
    • NY Fed Manufacturing
      • -6 vs -9, -15.6 prev
Market Movement Recap
10:22 AM

Weaker overnight and steady selling early.  10yr up 6.6bps at 4.29.  MBS down nearly a quarter point in 5.5 coupons.

01:44 PM

Bounce back a bit from weakest levels.  MBS down 6 ticks (.19) and 10yr up 4.8bps at 4.272

04:14 PM

Flat all afternoon with both MBS and Treasuries in line with the previous update

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