MBS Live Recap: Bonds Struggle to Hold Gains; Fed Announces 1.5 MBS Purchases

As of the 3pm CME close, 10yr yields were higher on the day.  Even though the losses were minimal, they're not what we'd expect given a 3% loss in stocks and a market that has frequently been trading risk-on/risk-off surrounding various covid/stimulus headlines.  There were no salient market movers behind the bond weakness.  MBS underperformed at first, but did a better job of holding their ground as Treasuries weakened later in the day (2.0 UMBS are unchanged at the moment).

Econ Data / Events
Market Movement Recap
08:36 AM

Markets are in the midst of a "risk-off" move as covid case counts surge worldwide and bonds correct toward lower yields after testing the upper reaches of a longer-term range.  10s are down 2bps to start and UMBS 2.0s are up 2 ticks (0.06).  Stocks are down nearly 2% from 5pm yesterday.

03:01 PM

As feared (though not necessarily expected), the first 2 days of the week have proven to be a head-fake for bond bulls.  Case in point, stocks are down nearly 3% and bonds can't manage to hold on to modest gains.  10yr yields are up 1bp at .779 and 2.0 UMBS are down 1 tick at 103-06 (-0.03 at 103.19).

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