Some Selling Pressure After Auction and Fed Minutes
3 Hours, 55 Min ago
MBS Recap
Some Selling Pressure After Auction and Fed Minutes
MBS Recap Matthew Graham | 3:21 PM
Some Selling Pressure After Auction and Fed Minutes
There were no market-moving economic reports scheduled for today regardless of the government shutdown. That left the focus entirely on the afternoon events: the 1pm 10yr Treasury auction and the 2pm release of the Fed Minutes (a more detailed account of the Fed meeting 3 weeks ago). The auction was slightly weaker than expected, which accounted for most of the upward pressure in yields in the afternoon. The minutes didn't help (even if they didn't necessarily hurt). Notable comments included mention of a few members who would have been OK with no rate cut and a majority of members remaining concerned about inflation.
modestly stronger overnight and holding so far. MBS up 2 ticks (.06) and 10yr down 2.4bps at 4.103
12:01 PM
Near weaker levels. MBS up 1 tick (.03) and 10yr down 0.9bps at 4.118
01:03 PM
No major reaction to middle-of-the-road auction. 10yr down 1bp at 4.117 and MBS up 1 tick (.03)
01:59 PM
MBS are 1 tick lower (.03) and 10yr yields are 0.4bps higher at 4.131
02:40 PM
Slight additional selling after Fed Minutes. MBS down 3 ticks (.09) and 10yr up 0.6bps at 4.133
Lock / Float Considerations
Risk/reward surrounding the lock/float decision remains muted during the government shutdown. The risk tolerant crowd is still waiting to see when the jobs report comes out after the government shutdown (as long as bonds don't lose too much ground between now and then).
