Inconsequentially Weaker and Increasingly Range-Bound

The word “range” appears in both the opening and closing commentary headlines.  That’s a surefire sign that something crazy is about to happen.  Either that, or bonds have just been increasingly range-bound.  Today wasn’t any worse than yesterday in that regard, but the modest volatility happened to be moving in an unfriendly direction.  Rather than attempt to force square pegs into round holes by tying this to today’s events, we’re more content to chalk this up to in-range volatility ahead of bigger-ticket events. 

Econ Data / Events

Housing Starts 

1.446m vs 1.537m f’cast, 1.599m prev

Building Permits

1.674m vs 1.650m f’cast, 1.696m prev

Industrial Production

0.6 vs 0.3 f’cast, 0.0 prev

Market Movement Recap

09:25 AM Slightly weaker in early trading, but finding footing now, probably.  10yr up 3bps at 2.824 and UMBS 4.0 coupons are down just over an eighth of a point. 

09:52 AM No longer finding footing!  Yields quickly up to new highs and MBS down to new lows.  10yr is up 7.4bps to 2.87 and 4.0 UMBS are down more than a quarter point on the day.

02:06 PM Off the weakest levels with steady gains since just after 10am–more noticeable in Treasuries.  10yr yields are still up 3.3bps on the day at 2.826 and MBS are still down just over an eighth of a point.

03:55 PM Gentle rally continues in Treasuries, but 10s are still 2.4bps higher on the day at 2.817.  MBS have been more sideways since 1pm with 4.0s roughly unchanged from the last update.

Published On: August 16, 2022 / Categories: Mortgage News /