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

08:18 AM

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.

10:05 AM

Brief and limited reaction to ISM Non-Manufacturing data.  Bonds hit weakest levels for a moment, but are already (maybe) bouncing back.

12:36 PM

The market appears to be on a 4-day weekend.  Extremely flat during domestic hours so far.  Both stocks and bonds.

03:07 PM

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.

MBS

UMBS 2.0

102-14 : +0-02

Treasuries

10 YR

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


Economic Calendar

Time Event Period Actual Forecast Prior
Monday, Jul 06
10:00 ISM N-Mfg PMI * Jun 57.1 50.1 45.4
10:00 ISM N-Mfg Bus Act * Jun 66.0 49.0 41.0

By Matthew Graham , dated 2020-07-06 15:44:30

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Courtesy of Mortgage News Daily

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