Bonds Close Out Epic Week of Resilience With Friendly Data
2 Hours, 8 Min ago
MBS Recap
Bonds Close Out Epic Week of Resilience With Friendly Data
MBS Recap Matthew Graham | 4:13 PM
Bonds Close Out Epic Week of Resilience With Friendly Data
Friday was a logically friendly day thanks to slightly lower CPI. But no matter what happened on any of the other 4 days, this week was all about bonds ending up at much stronger levels in spite of a jobs report that should have sent rates higher on Wednesday. Ironclad justification remains impossible, but the leading theory involves heavy liquidation mode in stocks/commodities on Thursday. Holiday weekend positioning could also be a factor. As such, we'll learn a lot more next Tuesday--especially if stocks find a reason to stage a big bounce.
Stronger After CPI and sideways since then. MBS up roughly and eighth and 10yr down 4bps at 4.06
01:52 PM
Losing ground modestly. MBS still up 2 ticks (.06) and 10yr still down 3.5bps at 4.066
02:58 PM
MBS up an eighth and 10yr down 4.7bps at 4.053
Lock / Float Considerations
Thursday night was a coin flip for locking/floating. It ended up being rate-friendly thanks to CPI, but the moderate gains suggest the mystery momentum that fueled an impressive week for bonds is starting to wane. Risk-averse clients continue to favor locking in these scenarios--especially with rates basically matching 3.5-year lows. Risk-tolerant clients have that much more room to set overhead lock triggers.
