Bonds were feeling a bit defensive ahead of today’s 7yr auction, and rightfully so!  7yr auction days have been rough in 2021.  The past 3 examples were rough, in large part due to auction results themselves.  Today was a bit different.  The auction was actually decent.  Bonds ended up selling off for other reasons.  More details on those in today’s video…

Econ Data / Events

  • Fed MBS Buying 10am, 1130am, 1pm

  • FHFA Home Prices 12.2 vs 12.1 prev
    Case Shiller Prices 11.9 vs 11.7 f’cast, 11.1 prev

  • Consumer Confidence 121.7 vs 113.0 f’cast, 109.0 prev

Market Movement Recap

08:31 AM

Mostly sideways but slightly weaker overnight.  Low volume/volatility.  No standout market movers.  10yr yields starting up 1.5bps at 1.583.  UMBS 2 ticks (-0.06) weaker at 103-16 (103.5).

12:11 PM

Definitely favoring weakness ahead of the 7yr auction–almost exclusively seen in Treasuries.  10yr yields are up 2.5bps at 1.593% and 2.5 UMBS are down 3 ticks (-0.09) at 103-15 (103.47).

01:05 PM

Nice, average results at 7yr auction, but only after a bit of AM bond market weakness helped soften prices.  Not much movement since then with 10yr at 1.597 and MBS staying flat in a range between 1 and 3 ticks (0.03 – 0.09) weaker on the day.

02:56 PM

Treasuries have weakened somewhat abruptly heading into the close with some traders citing a big corporate bond offering from Citi (why would that matter?).  There’s also a technical consideration as 10yr yields moved quickly up to the 1.62% level.  Either way, MBS have avoided most, but not all of the drama with 2.5 coupons now down an eighth of a point on the day.


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 2.5

103-15 : -0-03

Treasuries

10 YR

1.6180 : +0.0480

Pricing as of 4/27/21 3:30PMEST

Today’s Reprice Alerts and Updates

1:49PM  :  ALERT ISSUED: MBS Dragged Lower By Treasuries; Negative Reprice Considerations

1:05PM  :  No Whammies in 7yr Auction

9:06AM  :  Slightly Weaker Overnight. No Drama So Far


Economic Calendar

Time Event Period Actual Forecast Prior
Tuesday, Apr 27
9:00 CaseShiller 20 yy (% ) Feb +11.9 11.7 11.1
9:00 Monthly Home Price yy (%) Feb +12.2 12.0
9:00 CaseShiller 20 mm SA (%) Feb +1.2 1.1 1.2
9:00 Monthly Home Price mm (%) Feb +0.9 1.0
10:00 Consumer confidence * Apr 121.7 113.0 109.7
13:00 7-Yr Note Auction (bl)* 62

By Matthew Graham , dated 2021-04-27 15:30:06

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Courtesy of Mortgage News Daily

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