Although the bond market definitely had its own reasons to weaken last Friday, stocks have been making big enough moves to complicate things.  Simply put, we’ve had to wonder if bonds would be doing even worse if not for massive stock selling.  Today, we got our answer.  As a bond-bearish bonus, the 10yr auction was on the weak side as well.  All that having been said, the damage could have been a lot worse.

Market Movement Recap

08:20 AM

Bonds were initially stronger overnight on news of a vaccine trial delay.  Yields rose gradually, tracing a similar move higher in equities futures.  10yr yields moved into negative territory in the past hour, up 0.6bps a .687.  UMBS are starting out 2 ticks lower (-0.06).

12:30 PM

Bonds turned weaker just after 10am.  Stronger stocks have contributed to the pressure, but bonds are also considering the upcoming 10yr auction as well as the uptick in corporate bond issuance.  MBS are outperforming with 2.0 coupons off their lows and now only 1 tick weaker on the day.  10yr yields are trying to hold a ceiling at .70%.

01:06 PM

Treasuries losing ground after moderately weaker 10yr auction.  Yields up 2.3bps to new highs of .705%.  UMBS 2.0 down an eighth, near the lows 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.

MBS

UMBS 2.0

103-05 : -0-03

Treasuries

10 YR

0.7066 : +0.0226

Pricing as of 9/9/20 3:07PMEST

Today’s Reprice Alerts and Updates

1:11PM  :  ALERT ISSUED: Negative Reprice Risk Remains After Weaker Treasury Auction

11:03AM  :  ALERT ISSUED: Weakest Levels of The Day; Reprice Risk Increasing


Economic Calendar

Time Event Period Actual Forecast Prior
Wednesday, Sep 09
7:00 MBA Purchase Index w/e 317.7 309.6
7:00 Mortgage Refinance Index w/e 3415.1 3316.2
13:00 10-yr Note Auction (bl)* 35
Thursday, Sep 10
8:30 Core Producer Prices YY (%)* Aug 0.3 0.3
8:30 Jobless Claims (k) w/e 846 881
10:00 Wholesale inventories mm (%) Jul -0.1 -0.1
13:00 30-Yr Bond Auction (bl) 23

By Matthew Graham , dated 2020-09-09 15:09:11

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Courtesy of Mortgage News Daily

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