Last week was obviously all about the election.  By Friday, our recap said “forget the election” and focused on speculation that the Fed would soon be pressured to shift gears in its MBS buying plan (the pace of MBS outperformance is unsustainable).  But now we can forget about that too–at least for the time being.  Pfizer’s vaccine trial update dominates the headlines (much more effective than expected).  Markets reacted in a very clear way with both stocks and bond yields surging higher at the fastest pace in months.

20201109 open.png

In terms of the bigger picture trend in bonds, this move threatens to prolong the pain.  If yields can hold below .945, however, we’d still have a shot at reinforcing a ceiling.  That’s by no means something to plan on (not with yields only 1bp lower than that presently), but it would be “nice” if it happens.

20201109 open2.png

Looking ahead, there’s not much on tap this week other than Treasury auctions and the inflation reports (CPI/PPI), but the latter aren’t yet on trader’s radar as a major source of concern.  Markets are closed Wednesday for Veterans Day.

MBS Pricing Snapshot

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


UMBS 2.0

103-07 : -0-15


10 YR

0.9406 : +0.1206

Pricing as of 11/9/20 9:52AMEST

Tomorrow’s Economic Calendar

Time Event Period Forecast Prior
Monday, Nov 09
13:00 3-Yr Note Auction (bl) 54
Tuesday, Nov 10
13:00 10-yr Note Auction (bl)* 41
Wednesday, Nov 11
0:00 Veterans Day *
Thursday, Nov 12
8:30 Consumer Price Index (CPI) (%)* Oct 0.2 0.2
8:30 Core CPI (Annual) (%)* Oct 1.8 1.7
8:30 Jobless Claims (k) w/e 735 751
13:00 30-Yr Bond Auction (bl) 27
Friday, Nov 13
8:30 Core Producer Prices YY (%)* Oct 1.2 1.2
10:00 Consumer Sentiment Nov 82.0 81.8

By Matthew Graham , dated 2020-11-09 09:54:51

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Courtesy of Mortgage News Daily

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