Ending Near Unchanged Levels After Early Head Fake
MBS Recap Matthew Graham | 4:24 PM
Ending Near Unchanged Levels After Early Head Fake
Trading volumes confirm that bonds are 100% back in action, but after this morning's selling pressure proved to be a head fake, that volume hasn't translated to any meaningful momentum. This isn't too hard to accept considering the absence of big-ticket econ data. Things change on Wednesday with the release of ADP, JOLTS, and ISM. This is our first chance to see some actual data-driven volatility in several weeks.
Modestly weaker overnight and sideways so far. MBS down 2 ticks and 10yr up 1.2bps at 4.176
10:37 AM
Weakest levels of the day on defense spending comments. MBS down an eighth and 10yr up 2.4bps at 4.187
01:27 PM
Bouncing back now. MBS unchanged and 10yr up 1.6bps at 4.179
03:25 PM
Holding sideways near unchanged levels in MBS, currently down 1 tick (.03). 10yr yields up 1.1bps at 4.174
Lock / Float Considerations
The second half of the week brings a long-awaited glut of bigger-ticket data. The first hurdle is Wednesday morning's ADP, JOLTS, and ISM. Taken together, these introduce plenty of risk of a departure from the recent range, for better or worse. Risk-averse clients have an easy decision to make with average rates very close to long term lows.
