Bonds were mixed today with both MBS and Treasuries gaining ground (and then losing slightly less ground) at varying paces.  Treasuries outperformed, but that’s not a huge surprise on a rally day.  Both have bigger fish to fry in the days ahead with plenty of potential volatility from the election, Fed announcement, and NFP.  Stakes are higher for Treasuries compared to MBS, and MUCH higher compared to mortgage rates (which have been extremely well insulated by most of the recent bond market volatility due to historically wide lender margins).  Still, if there’s one market catalyst in the near term that could get things moving, it would be the election.  

Market Movement Recap

09:13 AM

Bonds opened stronger in Asia, lost some ground on stronger data in Europe, and have been moving into stronger territory ever since.  Both stocks and bonds are doing better as traders cautiously jump back into long positions for the new month.  10yr yields down 3+ bps to .84% and 2.0 UMBS up 6 ticks (.19) at 103-10 (103.31).

12:55 PM

Bonds are off their best levels, but not panicking.  The 1.5 UMBS coupon is the only noticeable laggard.  There is no overt underlying motivation for the move apart from the fact that 1.5 coupons are simply going to march to their own beat from time to time as they continue to build liquidity.

03:00 PM

UMBS 2.0 coupons joined in the selling trend and hit lows just before 2pm.  They haven’t moved much since then, but are still up 3 ticks (0.09) on the day.  10yr yields are at their highest levels since this morning, now down only 2.35bps on the day at .85%.  Very calm and narrow trading day relative to the volatility seen at the end of last week.

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

103-06 : +0-02


10 YR

0.8485 : -0.0105

Pricing as of 11/2/20 3:16PMEST

Today’s Reprice Alerts and Updates

1:30PM  :  ALERT ISSUED: Negative Reprice Risk Increasing

12:54PM  :  ALERT ISSUED: Small Chance of Negative Reprice Risk For a Few Lenders

10:17AM  :  Gains Ebb After Stronger ISM Data, But Only Briefly

Economic Calendar

Time Event Period Actual Forecast Prior
Monday, Nov 02
10:00 ISM Manufacturing PMI * Oct 59.3 55.8 55.4
10:00 Construction spending (%) Sep 0.3 1.0 1.4
Tuesday, Nov 03
9:45 ISM-New York index Oct 807.3
10:00 Factory orders mm (%) Sep 1.0 0.7

By Matthew Graham , dated 2020-11-02 15:18:22

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Courtesy of Mortgage News Daily

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