Bonds Remain Under Pressure, But MBS Outperformed
Bonds managed to remain sideways during AM hours. In fact, MBS were as much as an eighth of a point higher versus opening levels by 11:30am. The tone soured in the PM hours. 10yr yields ultimately crested 1.48% and MBS lost nearly a quarter of a point day over day. The weakness is decidedly focused on Treasuries due to the auction cycle, corporate issuance, and the "risk-on" momentum in the broader market.
Fed MBS Buying 10am, 11:30am, 1pm
moderately weaker overnight with losses extending into the 9am hour. Sideways since then with 10yr yields up 2.4bps at 1.456 and MBS down an eighth of a point.
A bit of weakness heading into the 1pm hour. MBS near lows, down 5 ticks (.16) and 10yr near highs, up 3bps at 1.463.
More new highs for 10yr yields, now up 5bps at 1.484%. MBS are unchanged from the last update.
Just a bit more weakness to end the day. MBS now down a quarter point at new lows of 102-04 (102.125). 10yr right in line with last update. Illiquidity is making the MBS losses look a few ticks bigger than they are, at times.