MBS Day Ahead: Auction Cycle Begins; Data Stays Light

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Posted To: MBS Commentary

One day down and 2 more to go without meaningful economic data. That didn't stop bonds from having a good day yesterday, but the gains were largely driven by European trading overnight. Treasuries have been less keen to follow Europe in lock step today, and we've slipped into progressively weaker territory by the open. 10yr yields begin the day just under 2bps higher at 2.386 and Fannie 3.5s are down 2 ticks at 102-20. To be fair to the aforementioned absence of economic data, we will get wholesale inventories at 10am, but this could scarcely be considered a market mover. The afternoon's 3yr Treasury auction has slightly more market moving potential, especially in light of the surprisingly strong auctions at the end of December. If we don't have the same type revelatory results…(read more)

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