MBS RECAP: Record High MBS Prices, Record Low Rates. What Next?
Bonds and rates clearly aren’t looking at economic data as a key source of motivation, nor are they playing by the normal set of rules. Coronavirus has rewritten those rules. How long can this all-time-low rate environment last and how do we approach it from a lock/float standpoint?
Econ Data / Events
11:30-11:50 AM (ET) – Fed 30yr UMBS Buying
ISM Non Manufacturing 57.1 vs 50.1 f’cast
ISM Business Activity 66.0 vs 49.0 f’cast
Market Movement Recap
Bond yields and stocks moved higher out of the gate in the overnight session. Both generally remained elevated into the domestic trading hours. 10yr yields are up 2.8bps at .696 and UMBS 2.0 are down just over an eighth of a point.
Brief and limited reaction to ISM Non-Manufacturing data. Bonds hit weakest levels for a moment, but are already (maybe) bouncing back.
The market appears to be on a 4-day weekend. Extremely flat during domestic hours so far. Both stocks and bonds.
A bit more movement heading into the 3pm CME close for bonds. 10yr yields at lows of day. MBS prices up an eighth of a point with 2.0 coupons up to 102.5. Stocks off highs, but still 1% better 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.
102-14 : +0-02
0.6890 : +0.0180
|Pricing as of 7/6/20 3:42PMEST|
Today’s Reprice Alerts and Updates
10:04AM : Very Small Move Back to Weaker Levels After Stronger ISM Data