Losses Continue for Treasuries, But Not MBS
Treasury yields were set to start the day lower before upbeat omicron news hit at 6:45am this morning. With that, a day of weakness was set in motion. Yields moved higher until noon before investors figured we'd seen enough to facilitate strong bidding a the 1pm auction of 10yr notes. They were right. The auction went smoothly, but was not strong enough to push bond yields into lower territory. MBS fared better, ultimately making it back to positive territory a few hours before the close.
Fed MBS Buying 10am, 11:30am, 1pm
Bonds were stronger at first in the overnight session with the sharpest gains following a German Bund auction. Gains reversed in Pfizer news 10yr is now up just under 1bp at 1.489 and MBS are down 1 tick (0.03) at 102-04 (102.125).
Treasuries continue to sell off in the domestic session. It's more to do with jitters ahead of the 10yr auction than Omicron news at this point. 10yr yields up 4.4bps at 1.526 and 2.5 UMBS down an eighth at 102-01 (102.03).
Uneventful 10yr auction with stats right down the middle. Bonds were stabilizing before that. 10yr up 3bps at 1.511. MBS down 2 ticks (0.06) at 102-04 (102.25).
Decent gains in the 1pm hour. MBS now UP 2 ticks (.06) and 10yr yields holding the small amount of recovered losses (still 1.511).