Little Changed After Early Rally and Steady Selling
Mon, Feb 10 2025, 4:21 PM
MBS Recap
Little Changed After Early Rally and Steady Selling
MBS Recap Matthew Graham | 4:20 PM
Little Changed After Early Rally and Steady Selling
Monday ended up being a relative non-event for the bond market. Trading was almost perfectly flat overnight. Big trades moved the whole pile right at the open and then again about 2 hours later. This effectively set the range for the rest of the day through the 3pm CME close. Tariff headlines had zero impact on bonds overnight, despite a token, fleeting impact on forex.
Flat overnight and slightly stronger now. MBS up 3 ticks (.09) and 10yr down 2.6bps at 4.466
12:59 PM
10yr down 0.2bps at 4.49, and MBS now back to unchanged.
03:15 PM
Treading water at weakest levels. MBS unchanged and 10yr up half a bp at 4.497
Lock / Float Considerations
With Friday's jobs report out of the way, Wednesday's CPI becomes the next major volatility risk in the near term. The jobs report likely serves a role to offer resistance to the recent bond rally as opposed to define an entire month of momentum (as jobs reports can sometimes do). If anything, CPI is slightly more likely to shape prolonged trends. This doesn't mean CPI is any more likely to help or hurt, simply that it's at least as big a risk/opportunity than jobs, if not bigger. In the short term, there's not a great calendar-based opportunity for a strong recovery until and unless CPI comes in weak.
