Potential Signs of GSE Buying as MBS Outperform
Potential Signs of GSE Buying as MBS Outperform
It was an uneventful day when it comes to scheduled data/events, and also pretty boring for the bond market in general. Most of the market's volatility continues playing out in stocks, commodities, crypto, etc. The most notable development for our area of focus was the MBS outperformance. Specifically, MBS were up about 2 ticks (.06) in price in the 2pm hour while 5 and 10yr Treasuries were down at least 6 ticks (.19) in price. Some of the Treasury weakness could be viewed as an artificial byproduct of yesterday afternoon's Treasury-specific late-day rally, but even if we factor that out, MBS are still outperforming. With no official buying schedule/report from GSEs, such instances of outperformance are some of the only clues we have as to MBS purchases taking place. This doesn't matter for any particular reason, but it addresses a frequently asked question.
modestly weaker overnight. MBS down 2 ticks (.06) and 10yr up 1.9bps at 4.199
MBS outperforming as Treasuries weaken. 10yr up 3.7bps at 4.217. MBS still down only 2 ticks (.06).
Best levels of the day for MBS, up 1 tick (.03). 10yd down 2.9bps at 4.21
Secret Econ Data Adding to The Rally
| Time | Event | Period | Actual | Forecast | Prior |
|---|---|---|---|---|---|
| Friday, Feb 06 | |||||
| 10:00AM | Feb Sentiment: 1y Inflation (%) | Feb | 3.5% | 4% | |
| 10:00AM | Feb U Mich conditions | Feb | 58.3 | 54.9 | 55.4 |
| 10:00AM | Feb Sentiment: 5y Inflation (%) | Feb | 3.4% | 3.3% | |
| 10:00AM | Feb Consumer Sentiment (ip) | Feb | 57.3 | 55 | 56.4 |
| 12:00PM | Fed Jefferson Speech | ||||
| 3:00PM | Dec Consumer credit (bl) | Dec | $8B | $4.23B | |
| Monday, Feb 09 | |||||
| 11:00AM | Jan Consumer Inflation Expectations | Jan | 3.4% | ||
| 1:30PM | Fed Waller Speech | ||||
| 2:30PM | Fed Miran Speech | ||||
| 3:15PM | Fed Bostic Speech | ||||
| 5:00PM | Fed Miran Speech | ||||
