With modest overnight weakness and a small negative reaction to this morning’s headlines (ADP and Treasury issuance), bonds may be encountering some more resistance on their journey toward lower yields and higher prices. Is this a meaningful signal or just incidental consolidation?
Econ Data / Events
20min of Fed 30yr UMBS Buying 10am, 1130am (M-F) and 1pm (T-Th)
ADP Employment 167k vs 1.500m f’cast, 4.314m prev
ISM Services 58.1 vs 55.0 f’cast, 57.1 prev
Market Movement Recap
10yr yields aren’t panicking, but they’re up roughly 3.5bps on the day at .546 after a strong ADP revision and big increase to Treasury issuance. As expected, MBS are outperforming amid general bond market weakness with 2.0 coupons down only 3 ticks (0.09) at 103-20 (103.625).
Modest weakness after super strong ISM data (not necessarily because of it). MBS and Treasuries at weakest levels but not panicking. 10yr = .5477%, UMBS 2.0 down 0.09 on the day (3 ticks).
General malaise (or insignificant consolidation of the previous rally?) continues as MBS hit their lows (down almost a quarter point). 10yr yields are sideways near their higher levels of 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.
103-16 : -0-07
0.5494 : +0.0364
|Pricing as of 8/5/20 4:04PMEST|
Today’s Reprice Alerts and Updates
4:00PM : ALERT ISSUED: Negative Reprices Becoming a Stronger Possibility
2:54PM : ALERT ISSUED: Negative Reprice Risk Considerations
10:25AM : ALERT ISSUED: Bonds at Weakest Levels After PMI Data
8:36AM : Interesting Reaction to ADP; Treasury Issuance Update Adding Pressure