Econ data, Treasury auctions and Fed speakers all failed to move the needle.  Bonds only showed signs of life in response to new corporate debt issuance and a big sell-off in stocks.  The net effect left Treasuries and MBS effectively unchanged.  No surprise in the current environment!

Market Movement Recap

09:47 AM

No surprises here relative to the recent playbook.  Stocks drifted modestly higher overnight and bond yields followed.  10yr notes are currently up half a bp at .676 and 2.0 UMBS are down 1 tick (0.03) at 102-31 (102.97).  No major reaction to the just-released Markit PMI data.

01:05 PM

Corporate bond weakness leveled off and the 5yr Treasury auction was strong enough to help reinforce the ceiling for now.  10yr yields are 1.3bps higher on the day at .684 and MBS are near their best levels (unchanged on the day) just a half a tick under 103.0

03:10 PM

Big drop in stocks in the past hour–enough to be of some benefit to the bond market.  S&P futures off more than 2% now.  10yr yields almost back to positive territory.  2.0 UMBS are off in their own world, still trading the same sideways range as yesterday, and still at 103.00


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

103-01 : +0-01

Treasuries

10 YR

0.6741 : +0.0101

Pricing as of 9/23/20 4:03PMEST

Today’s Reprice Alerts and Updates

11:08AM  :  ALERT ISSUED: Corporate Issuance Causing Weakness, But Not Enough For Reprices

10:17AM  :  No Major Reaction to Markit PMI Data


MBS Live Chat Highlights

Matt Graham  :  “Important thing to remember from the Fed’s perspective is that inflation is like a stalled car in a snowstorm on a mountain with no parking brake. Post-financial crisis and post-covid, left to its own devices, that car will roll downhill, crushing the people beneath it. If the Fed pushes it uphill, but not enough, they will get eaten by the bears that live on the lower half of the mountain. If they push too much too fast, there’s a dragon at the top of the mountain that will light everyone on fire. So they’re trying to get the damn thing more or less perfectly 3/4 of the way up the mountain without too much sudden movement in either direction.”


Economic Calendar

Time Event Period Actual Forecast Prior
Wednesday, Sep 23
7:00 MBA Purchase Index w/e 327.0 316.2
7:00 Mortgage Refinance Index w/e 3579.8 3289.4
9:00 Monthly Home Price yy (%) Jul 6.5 5.7
9:45 PMI-Composite (source:Markit) * Sep 54.4 54.6
13:00 5-Yr Note Auction (bl)* 53

By Matthew Graham , dated 2020-09-23 16:05:23

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Courtesy of Mortgage News Daily

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