MBS RECAP: Mortgages Outperform as Treasuries Slide Sideways at Weaker Levels

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Posted To: MBS Commentary

Treasuries were under pressure from a correction in European markets (stocks and bond yields higher) overnight MBS and Treasuries opened noticeably weaker. MBS ticked painstakingly higher while Treasuries held flat Data was overlooked and end-of-week tradeflows set the tone early In general, it was still a good day for bonds, with closing levels being the 2nd best this week, behind Thursday. Bond markets hit the 3pm CME close in solid shape on the week with 10yr yields at 1.721 and Fannie 3.0s unchanged on the day at 102-29. That's roughly a 6bp drop on the week for Treasuries and more than a quarter point gain for MBS. With those factoids in mind, we can forgive the 10yr note for rising roughly 3bps on the day, especially considering that 1.72 was the low end of our target range for the…(read more)

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