Wild Ride For MBS as Traders Digest New Developments
Wild Ride For MBS as Traders Digest New Developments
We may have been looking to the jobs report as this week's biggest potential source of volatility, but that changed on Thursday afternoon after Trump's $200bln MBS buying announcement. Treasuries have only been able to watch from the sidelines. At one point this morning after the jobs data, Treasuries were several bps weaker while MBS were in the midst of their biggest rally in months (up more than a half point at the time). There was a rapid "distribution" phase following the initial rally, but prices bounced back to end the day up about a quarter point. Higher coupons are getting no love as they are not assumed to be in fashion as the new buying commences. Details continue to matter, and we'll continue to wait for more of them, but based on volume and volatility, MBS traders are taking this very seriously.
Wild Ride For MBS as Traders Digest New Developments
| Time | Event | Period | Actual | Forecast | Prior |
|---|---|---|---|---|---|
| Monday, Jan 12 | |||||
| 11:30AM | 3-Yr Note Auction (bl) | 58 | |||
| 1:00PM | 10-yr Note Auction (bl) | 39 | |||
| Tuesday, Jan 13 | |||||
| 12:00AM | Roll Date - UMBS 30YR | ||||
| 6:00AM | Dec NFIB Business Optimism Index | Dec | 99.5 | 99.0 | |
| 8:15AM | ADP Employment Change Weekly | 11.5K | |||
| 8:30AM | Dec y/y Headline CPI (%) | Dec | 2.7% | 2.7% | |
| 8:30AM | Dec m/m Headline CPI (%) | Dec | 0.3% | ||
| 8:30AM | Dec y/y CORE CPI (%) | Dec | 2.7% | 2.6% | |
| 8:30AM | Dec m/m CORE CPI (%) | Dec | 0.3% | ||
| 10:10AM | Jan IBD economic optimism | Jan | 48.2 | 47.9 | |
| 1:00PM | 30-Yr Bond Auction (bl) | 22 | |||
| 1:00PM | 30-Year Bond Auction | 4.773% | |||
| 2:00PM | Dec Federal budget (bl) | Dec | $-173B | ||
