Uneventful Friday. Thoughts Turning to CPI

Apart from the fact that 10yr Treasury yields are about 25bps higher than they were before last Friday’s jobs report, it was an uneventful week for the bond market with only one or two exceptions.  The first exception was the exceptionally large amount of corporate bonds that hit the market in the first half of the week.  The result was fairly constant upward pressure in rates for no other apparent reason.  The 2nd was Wednesday’s ISM Services data which added to the upward pressure.  Thursday marked a technical correction/recovery and Friday ended up being entirely superfluous.  Thoughts are already turning to next week’s CPI which occurs one week before a fairly important Fed meeting.  Volatility potential would be high anyway, but doubly so in this case as the Fed is in the blackout period ahead of its meeting, thus allowing the market’s imagination to run wilder than normal.

Econ Data / Events

Wholesale Inventories

-0.2 vs -0.1 f’cast, -0.7 prev

Market Movement Recap

09:33 AM Stronger right at the start of the overnight session, weaker in Europe, but bouncing back early.  10yr down 1.8bps at 4.232.  MBS up 3 ticks (.09).

12:03 PM steady weakness since 10am.  MBS now unchanged and 10yr up 0.2bps at 4.25%.

02:28 PM Slightly weaker into the PM hours, but bouncing now.  MBS up 1 tick (0.03) and 10yr back down to 4.25% after rising to 4.264%

04:00 PM Very flat in the PM hours.  MBS down 1 tick (0.03) and 10yr yields up 0.6bps at 4.256.

Published On: September 8, 2023 / Categories: Mortgage News /