No Love For Bonds Despite Decent Auction and Stock Sell-Off
Bonds started the day in moderately weaker territory and traded a sideways range (in the bigger picture) all day. It was roughly the same story for MBS with 3.0 coupons not underperforming Treasuries nearly as much as yesterday. The 1pm 5yr Treasury auction was strong, but there was only a modest in-range rally before bonds continued to weaker levels. Bonds weren’t even able to take solace in the lowest stock prices since June 2021.
Econ Data / Events
Fed MBS Buying 10am, 11:30am, 1pm
Market Movement Recap
08:12 AM Weaker overnight amid a risk-on move for financial markets. 10yr yield up 3 bps at 1.976. UMBS 3.0 coupons still trying to find liquidity (typical for this time of day), but should be just a hair below ‘unchanged’ (currently an eighth of a point lower due to illiquidity).
09:53 AM Additional weakness at the 9:30am NYSE Open. MBS down just over an eighth to new lows. 10yr up 5.4bps to new highs (1.996).
11:05 AM losses reversing course. Oil had been rising, but has leveled off. 10yr still up 2bps, but down to domestic lows at 1.963. UMBS 3.0 just a hair under unchanged, but illiquid at the moment.
01:11 PM Little changed after relatively strong 5yr auction. MBS are UP 1 tick on the day (+0.03) and Treasuries are sideways at slightly weaker levels. 10yr up 2.6bps at 1.97.
03:30 PM Heading out at the lows of the day. MBS down 6 ticks (.19) from the afternoon highs. 10yr yields up more than 4bps at 1.986.