Solid Conclusion to a Solid Week. Has The Tide Turned?
Fri, Dec 6 2024, 4:57 PM
MBS Recap
Solid Conclusion to a Solid Week. Has The Tide Turned?
MBS Recap Matthew Graham | 4:57 PM
Solid Conclusion to a Solid Week. Has The Tide Turned?
After Thanksgiving week introduced a potential breakout from the recent uptrend in yields, this week kept hope alive. It also kept us in suspense until today due to the jobs report. Despite a decent facade (227k vs 200k f'cast), the closer one examined today's jobs data, the weaker it began to look. Markets agreed without much hesitation. It wasn't as if the data was downbeat enough for a massive rally, but we'd argue that today's modest rally is still a great victory on a week where yields were already pushing the lowest levels since October 21st. Next week will be important in determining the endurance of this rally with Treasury auctions and inflation data. The following week will set the tone for the end of the year with the Fed's dot plot and rate announcement.
Fairly flat overnight and modestly stronger after jobs report. MBS up just over an eighth and 10yr down 1.8bps at 4.153
10:03 AM
MBS now up a quarter point and 10yr down 3bps at 4.14
11:10 AM
off the highs. MBS now up only an eighth on the day and 10yr up .4bps at 4.175
04:40 PM
Heading out near the day's best levels. MBS up a quarter point and 10yr down 2.3bps at 4.148
Lock / Float Considerations
Rates are at the lowest levels in a month and a half after the jobs report. That's a compelling lock opportunity for the risk averse crowd. While there's no guarantee that recently friendly momentum will continue, the risk-tolerant crowd tends to approach these scenarios from a "trailing stop" mindset (i.e. waiting for bond market weakness to force their hands). As always, the specific amount of weakness would be a subjective decision for the client/scenario in question.
