Bonds took a bit of a lead-off heading into today’s Fed announcement as 10yr yields flirted with a break below 1.0% for the first time since cresting that level in early January.  As expected and hoped, the Fed statement was a snoozer.  If anything, it was bond-friendly and Powell’s press conference even more so.  Still, bonds barely budged.  Stocks were much more volatile with S&P futures falling more than 3% by the end of the day.  Last but not least, here’s an obligatory Game Stop price update: 339.7 at the close, more than doubling yesterday’s close.

Econ Data / Events

  • Fed UMBS Schedule 10am, 1130am, 1pm

  • Durable Goods: 0.2 vs 0.9   (Core CapEx: 0.6 vs 0.6)

Market Movement Recap

09:09 AM

Bonds rallied moderately overnight with most of the gains seen during the European session.  Early domestic traders piled into the same trade, especially after the weaker-than-expected Durable Goods data.  Bonds have their sights set on a break below 1.0% in 10yr yields and are currently less than 1bp away.  MBS are up an eighth of a point and stocks are down more than 1%.

01:43 PM

MBS are back in line with AM levels after a late morning rally that took 1.5 coupons more than a quarter of a point higher on the day.  10yr yields were unable to crack below 1.0%, but remain within striking distance (1.014%).  Stocks are still down big (1.5%).

03:38 PM

Very quiet trading during and after Fed statement and Powell press conference.  Powell was utterly supportive, but markets assumed he would be.  Bonds moved a hair higher in yield, but are now back in line with pre-Fed levels (same as the last update, except stocks have continued to tank, now down 2.7%).


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

103-14 : +0-02

Treasuries

10 YR

1.0160 : -0.0240

Pricing as of 1/27/21 4:57PMEST

Today’s Reprice Alerts and Updates

2:06PM  :  Fed Statement Little-Changed; No Reaction in Bonds So Far

8:51AM  :  Lowest Yields in Weeks After Durable Goods Miss


MBS Live Chat Highlights

Matt Graham  :  “This could be fun to look back on in a few years: POWELL: DECLINES TO COMMENT SPECIFICALLY ON GAMESTOP STOCK VOLATILITY”

Matt Graham  :  “first question to Powell: game stop, wow”

Matt Graham  :  “POWELL: INFLATION HAS AVERAGED LESS THAN 2% FOR A QUARTER CENTURY”


Economic Calendar

Time Event Period Actual Forecast Prior
Wednesday, Jan 27
7:00 MBA Refi Index w/e 4261.5 4484.2
7:00 MBA Purchase Index w/e 334.2 348.2
8:30 Core CapEx (%)* Dec 0.6 0.6 0.5
8:30 Durable goods (%)* Dec 0.2 0.9 1.0
14:00 FOMC rate decision (%)* N/A 0 -.25% 0 -.25% 0 -.25%
14:36 Powell Press Conference *

By Matthew Graham , dated 2021-01-27 16:59:35

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Courtesy of Mortgage News Daily

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