MBS RECAP: It Could Have Been a Lot Worse


Posted To: MBS Commentary

If we went back to Monday morning and learned that today's NFP number would come in at 224k, any sane person would have guessed yields would be much higher than they are this afternoon. At the time, 10s were just over 2.02%, and we ended today at just under 2.04%. That's a huge victory in more ways than one. Yes yes yes… the losses were pretty big today (8.6bps in 10yr yields and 3/8ths of a point in MBS), but everything's relative. Keep in mind that markets were positioned for a disappointing NFP based on the balance of data in the rest of the week. So we had to sell-off, not only in response to the strength of NFP, but also in response the absence of NFP weakness (i.e. there was extra strength on Wednesday that bonds didn't truly "earn"). That's why I bring…(read more)

Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Show Buttons
Hide Buttons