MBS Live Recap: Incidental Weakness

This morning's commentary covers everything that needs to be said in today's closing commentary.  To recap, this is a time of year with lower volume/liquidity/participation, and that greases the skids for inconsequential volatility to be slightly more noticeable.  That was today in a nutshell.  As expected, weakness persisted into the 20yr bond auction and then abated in the afternoon.  For those who insist on being concerned about some technical tea leaf, the 10yr pivot point at 1.37+ is worth keeping an eye on (3 distinct bounces on each of the past 3 weeks.

Econ Data / Events
Market Movement Recap
08:56 AM

Moderately weaker overnight in a broader continuation of the bounce that began at the start of the overnight session on Sunday night.  10yr up 3.5bps at 1.463 and MBS down 3 ticks (0.09) at 102-03 (102.09).

12:37 PM

Steady weakness since 4am.  The selling is linear and it lacks the telltale volatility connecting it to data/events.  10yr up 6.3bps at 1.471 and 2.5 UMBS down nearly a quarter point (but only an eighth intraday).

02:49 PM

Brief, modest recovery after 20yr auction, but now back to the weakest levels of the day.  10yr up 6bps at 1.486 and MBS down a quarter point at 101-30 (101.94).

04:38 PM

MBS caught their breath and Treasuries recovered just a bit more.  10yr up only 3.9bps now at 1.467 and 2.5 UMBS down only 7 ticks (0.22) at 101-31 (101.97).

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