Bond yields rose overnight–well before NFP came out–following the senate’s passage of a budget resolution that clears the way for (eventual) passage of the $1.9 trillion stimulus package.  NFP helped (then hurt, then helped again), but bonds ultimately gave in to rising rate pressures as traders began to build in a concession for next week’s Treasury auction cycle.  10yr yields were up roughly 3bps on the day at the close, but MBS managed to hold roughly unchanged (further adding emphasis to the Treasury auction trepidation and budget related concerns as a bond market mover). 

Econ Data / Events

  • Fed MBS Buying 10am, 1130am, 1pm

  • Nonfarm Payrolls….. 49k vs 50k f’cast, -227k prev 
    Unemployment %…. 6.3 vs 6.7 f’cast, 6.7 prev
    Avg work week…….. 35 hrs vs 34.7 prev/f’cast. New record

Market Movement Recap

08:20 AM

Bounds vault higher overnight as senate approves $1.9 trillion dollar budget plan.  10yr up almost 4 bps at 1.172% ahead of NFP.  2.0 UMBS down almost an eighth.

08:52 AM

Quick, moderately big gains following big miss in NFP.  MBS turned green and Treasuries came close, but 10yr yields just moved back up, +2.82bps at 1.164%.  MBS are back to ‘unchanged.’

10:42 AM

Choppy 2-way trading in heavy volume… now declining and resolving with a technical bounce at the lowest yields of the day (10yr couldn’t break below 1.135 y’day afternoon or this morning).  Weakening a bit since then.  UMBS 2.0 hit a similar resistance level at 103-03 (103.09), but are still roughly unchanged on the day.

02:40 PM

Volatile morning gave way to quieter afternoon.  Treasuries sideways to slightly weaker.  MBS outperforming–holding sideways as opposed to showing the moderate weakness seen in Treasuries.  Stocks slept in and haven’t done much other than grind sideways at another all-time high.


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 : +0-00

Treasuries

10 YR

1.1690 : +0.0300

Pricing as of 2/5/21 5:14PMEST

Today’s Reprice Alerts and Updates

9:42AM  :  Don’t Call It A Comeback (Nice Comeback For MBS)

9:01AM  :  ALERT ISSUED: Fun While It Lasted, But Post-NFP Gains Are Now Gone

8:39AM  :  Big Miss in Payrolls, But Big Surprises In The Details


Economic Calendar

Time Event Period Actual Forecast Prior
Friday, Feb 05
8:30 Non-farm payrolls (k)* Jan 49 50 -140
8:30 Average workweek hrs (hr)* Jan 35.0 34.7 34.7
8:30 Unemployment rate mm (%)* Jan 6.3 6.7 6.7

By Matthew Graham , dated 2021-02-05 17:16:00

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Courtesy of Mortgage News Daily

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