MBS may not be quite as high as they were yesterday, but in the bigger picture, today's levels are right in line with the best we've seen in more than 3 years. More importantly, mortgage rates are verifiably at the best levels in more than 3 years. There was no major volatility or any remarkable econ data. Tomorrow's calendar is similarly quiet. Stock/bond correlations broke down in the afternoon, but as bonds search for any sources of guidance, that correlation could certainly return if stocks are making bigger moves.
Mostly flat overnight and not much movement so far. MBS down 1 tick (.03) and 10yr up 0.8bps at 4.04
01:49 PM
Modest recover after AM weakness. MBS down 1 tick (.03) again after being down 3 ticks (.09) at 10am. 10yr down 0.3bps at 4.030
03:47 PM
Losing ground modestly into PM. MBS down 2 ticks (.06) and 10yr up half a bp at 4.038
Lock / Float Considerations
Bonds erring on the stronger side of the prevailing range to start the new week, ostensibly due to general trade-related uncertainty. Much like 3 weeks ago (when we said bonds would need convincing from econ data in order to improve very much), we'd similarly need to see some strong econ data to push rates meaningfully higher. In other words, we're a bit more insulated than we had been, but we also have to consider that any big announcement on trade can cause this insulation to vanish, and such announcements don't adhere to set schedules like econ reports.
