Posted To: MBS Commentary
Fear of The I-Word Today’s 5yr TIPS auction met with heavy demand for inflation protection. While that didn’t move markets at the time, it nonetheless underscores the heavy inflation concern driving traders to flatten the yield curve and move up estimated Fed rate hike timing. Indeed, Fed Funds Futures are now pricing in the first hike by June 2022. MBS underperformed 10yr yields, but kept better pace with 5yr Treasuries. Data had no impact as the market traded largely on momentum, technicals, and deal-related tradeflows (i.e. corporate bond issuance). Econ Data / Events Fed MBS Buying 10am, 1130am, 1pm Jobless Claims …. 290k vs 300k f’cast Philly Fed ………… 23.8 vs 25.0 f’cast Existing Sales 6.29m vs 6.09m f’cast Leading Indicators …0.2 vs 0.4 f’cast Market…(read more)
