Gains Evaporate After Weaker Auction; Sideways Volatility Expected Ahead of CPI

CPI, NFP, CPI, Fed Day, NFP, CPI…  Maybe throw in some ISM data or the European Central Bank here and there and you’d have a perfectly condensed script for the story of mortgage rate movement over the past few months (ok, maybe for the past year).  This week has been an epilogue to last week’s NFP (jobs report) with some Fed Day addendums and follow-up courtesy of Powell and several other Fed speakers.  Treasury auctions added a bit of volatility with yesterday’s 10yr auction helping and today’s 30yr bond auction undoing all of those gains and then some.  Yields continue failing to break back into the sub 3.62% trading range and we expect more of this frustrating sideways volatility ahead of the next big flashpoint: Tuesday’s CPI data.  It’s hard to imagine anything too consequential happening before then when it comes to things that can be scheduled or predicted. 

Econ Data / Events

Jobless Claims

196k vs 190k f’cast, 183k prev

Market Movement Recap

10:36 AM Very flat in Asia followed by modest gains in Europe.  Now backtracking on some of the gains.  MBS down 3 ticks (0.09) on the day.  Treasuries still slightly stronger, but up to 3.609 from previous lows of 3.575.

12:21 PM near the day’s weakest levels with about half an hour to go before the Treasury auction.  MBS down an eighth of a point on the day.  10yr yields down 1bp at 3.605.

01:25 PM Noticeably weaker after the 30yr bond auction.  10yr yields up 3bps at 3.647.  MBS down 6 ticks (.19).

Published On: February 9, 2023 / Categories: Mortgage News /