Last week saw the first major break higher after a calm, sustained moved toward lower rates that began in mid-June.  This week had a chance to confirm the drama or push back against it.  Thankfully, it was the latter, even though the mortgage market had some of its own specific drama to cope with.

Econ Data / Events

  • 20min of Fed 30yr UMBS Buying 10am, 1130am (M-F) and 1pm (T-Th)

  • Markit Composite PMI 54.7 vs 50.3 prev

  • Services PMI 54.8 vs 51.0 f’cast

  • Manufacturing PMI 53.6 vs 51.9 f’cast

  • Existing Home Sales 5.86m vs 5.38m f’cast, 4.70m prev

Market Movement Recap

08:28 AM

Bonds were modestly stronger overnight in a move that lines up very well with outflows in the stock market.  10yr yields are down 2.75bps at .625 and 2.0 UMBS are up 3 ticks (0.09).

09:49 AM

Steady losses leading up to PMI data and then some sharper weakness immediately thereafter.  Treasuries back to unchanged (almost 3bps off the lows).  MBS down almost an eighth of a point on the day and more than an eighth from morning highs.

01:06 PM

Treasuries fought back into slightly stronger territory and have been sideways since then.  MBS continue underperforming and remain near the lows of the day.

05:12 PM

Both Treasuries and MBS rallied into the end of the day with 2.0 coupons actually turning green by 1 tick (0.03).  10yr yields ended the day down 1.62 bps at .6363%. All this despite a stock rally that left S&P futures up a third of a percent.  


MBS Pricing Snapshot

Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.

MBS

UMBS 2.0

103-08 : +0-01

Treasuries

10 YR

0.6363 : -0.0077

Pricing as of 8/21/20 5:15PMEST

Today’s Reprice Alerts and Updates

9:48AM  :  ALERT ISSUED: Bonds Losing Ground After PMI Data


Economic Calendar

Time Event Period Actual Forecast Prior
Friday, Aug 21
9:45 PMI-Composite (source:Markit) * Aug 54.7 50.3
9:45 PMI-Manufacturing (Markit) * Aug 53.6 51.9 50.9
9:45 PMI-Services (Markit) * Aug 54.8 51.0 50.0
10:00 Existing home sales (ml)* Jul 5.86 5.38 4.72
10:00 Exist. home sales % chg (%)* Jul +24.7 14.7 20.7

By Matthew Graham , dated 2020-08-21 17:17:13

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Courtesy of Mortgage News Daily

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