Traders Move to Sidelines Ahead of Fed Announcement
September's big Fed announcement doesn't hit until next Wednesday, but it's not too early for markets to freak out about it a little bit. The fear is expressed in the form of a move to the sidelines for both stocks and bonds. In other words, both sides of the market sold off today. Treasuries fared a bit better, and MBS fared better still (2.0 coupons only dropped an eighth of a point by 4pm). 10yr yields thought better of breaking too far above the 1.37% technical level and have been settling there in the after hours session. Next week remains anyone's game with a range breakout being all but guaranteed.
Fed MBS Buying 10am, 1130am, 1pm
Modestly weaker overnight with selling pressure picking up as we enter the 9am hour. 10yr is up almost 3bps at 1.363 and MBS are down an eighth of a point--well below the lowest prices of the week.
Bonds found footing shortly after 10am and 10yr yields have slowly worked their way back to the 1.37% technical level. MBS are down just over an eighth of a point now after being down as much as a quarter point at the weakest levels.
Healing continues as time ticks down on the trading session. No huge changes from the last update, but MBS have improved another tick (0.03). Volatility has been nonexistent.