Incidental Weakness. Bigger Considerations on The Horizon
1 Hour, 45 Min ago
MBS Recap
Incidental Weakness. Bigger Considerations on The Horizon
MBS Recap Matthew Graham | 3:34 PM
Incidental Weakness. Bigger Considerations on The Horizon
Without any data or compelling market movers, bonds came into the day light on inspiration. Low volume/liquidity left the door open for any determined traders to have a bigger-than-normal influence on the market. That arguably happened between 9am and 10:30am ET with both stocks and bonds losing ground simultaneously. This coincided perfectly with an uptick in Fed rate hike expectations seen via near-term Fed Funds Futures. There are bigger fish to fry in the coming week with a more robust econ calendar and the Fed's Jackson Hole conference.
Sideways to slightly stronger overnight. MBS up 1 tick (.03) and 10yr down half a bp at 4.697.
10:34 AM
MBS down an eighth and 10yr up 2.7bps at 4.728
01:47 PM
MBS down 5 ticks (.16) and 10yr up 3.9bps at 4.741
Lock / Float Considerations
8/21/26 - Lock/float risk remains higher than normal as long as each new day brings another coin flip on the fate of the war and fuel prices. In addition, corporate bond issuance is keeping broad pressure on yields. We'd like to see a clear show of support and a confirmed downtrend before reconsidering a defensive stance. As always, there will be short-term pockets of opportunity, but we're more focused on a sustainable shift in momentum (which has yet to show up).
