Fed Week Uncertainty Makes For Logical Consolidation
Fri, Sep 13 2024, 4:16 PM
MBS Recap
Fed Week Uncertainty Makes For Logical Consolidation
MBS Recap Matthew Graham | 4:16 PM
Fed Week Uncertainty Makes For Logical Consolidation
Bonds rallied sharply just over a month ago following a downbeat jobs report and other data. They then consolidated ahead of the early September data before rallying just a bit more. The present week didn't add much to the broader context and thus presented a good opportunity for another consolidation ahead of a week that's sure to spark some volatility. Friday's only hope was Consumer Sentiment and it was not up to the task of raising any heart rates. Bonds began the day in modestly stronger territory and are going out the door at almost the exact same levels.
Slightly stronger overnight and giving back some gains in AM hours. MBS still up 1 tick (.03) and 10yr down 1.1bps at 3.664.
12:55 PM
Bouncing back into positive territory into the PM hours. MBS up an eighth and 10yr down 2.6bps at 3.649
02:31 PM
New highs for MBS, up 5 ticks (.16). 10yr down 2.9bps at 3.645
Lock / Float Considerations
With bonds weathering this week's data and Treasury auction in unchanged territory, risk-tolerant floaters have yet to see the sort of big bad movement that would compel them to take chips off the table. The exception would be for those who've floated and feel like they're pressing their luck. Risk averse clients are always compelled by the lowest rates in more than a year, even if the trend has been friendly. Indeed, it is worth considering that even friendly trends occasionally meet technical resistance in order to reset and continue. The more we improve, the more one might be concerned about seeing such a consolidation.