Issuance Sets The Tone and Keeps Bonds Range-Bound

Bonds have now spent more than 2 weeks locked inside a very narrow trading range.  As of yesterday, yields were trying to break through the floor in the morning before moving back into the range by the close.  Today continued the rebound with yields moving roughly back to the midpoint (i.e. 3.76+ in a range between roughly 3.68 and 3.84.  The initial weakness was driven by a large corporate bond offering from Amazon.  That set the tone for the day (closing yields were very close to the initial sell-off levels).  In unrelated news, new conforming loan limits came out much higher than expected at 726,200.  Today’s video discusses all of the above.

Econ Data / Events

Monthly Home Price Index

FHFA +0.1 vs -0.7 prev
Case Shiller -1.2 vs -1.3 prev

Annual Home Price Index

FHFA 11.0 vs 12.0 prev
Case Shiller 10.4 vs 13.1 prev

Market Movement Recap

08:41 AM Slightly stronger overnight, but immediately moving into negative territory on a combination of German inflation data and big corporate bond issuance.  10yr up 4bps at 3.718.  MBS down a quarter point. 

12:41 PM Weakest levels just before 9:30am.  Bounced back a bit after that and now trading sideways to slightly weaker with MBS off a quarter point on the day.  10yr yield up 5.8bps at 3.737.

02:40 PM back at the weakest levels of the day with MBS down more than 3/8ths and 10yr yields up 8bps at 3.757.  

Published On: November 29, 2022 / Categories: Mortgage News /