Auctions Caused Modest Weakness, But Mostly in Advance

As the bond market looks at the 5yr Treasury auction in the rearview, there’s a figurative sigh of relief.  Granted, it’s not enough to get Treasuries or MBS back into positive territory, but it does seems to confirm the “anxiety” trade driving the weakness earlier in the day.  That conclusion is further supported by the Treasury outperformance of MBS in the afternoon after the underperformance earlier in the day.  Despite the intraday volatility, none of of the bigger picture range boundaries were threatened and there were no interesting implications for bond market momentum.  “Generally sideways since CPI and waiting on the next big data” has been a good recap for nearly 2 weeks now.

Market Movement Recap

09:48 AM Initially stronger overnight, but losing ground modestly into domestic hours.  MBS are still up 1 tick (.03).  10yr up 1.4bps at 4.262.

10:49 AM Some selling heading into the 10am hour.  MBS down 2 ticks (.06).  10yr up 3.2bps at 4.28

01:06 PM Modest additional weakness before and after 5yr Treasury auction.  10yr up 5.5bps at 4.303.  MBS down 5 ticks (.16).

03:48 PM Recovering a bit after getting the auctions out of the way.  MBS down 5 ticks after being down nearly a quarter point a short while ago.  10yr up only 3.3bps at 4.281.

Published On: February 26, 2024 / Categories: Mortgage News /