MBS RECAP: Once More With Less Feeling

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Posted To: MBS Commentary

If we look solely at the US trading hours, yesterday and today form a nearly perfect 2-day trend just slightly higher in rate. Fannie 4.0 MBS prices have similarly shed 3/32nds (0.09) in a well-behaved trend channel. If we include the full trading session, however, yesterday was the bigger deal and today was an afterthought. On the other hand, yesterday was extremely slow in terms of volume. Today wasn't too much better, but it was active enough to suggest yesterday's selling wasn't a fluke. We won't see the first opportunity for bonds to digest any major econ data until Thursday morning (CPI) although tomorrow's PPI report is certainly a step up from today. We'll also get the 10yr Treasury auction in the afternoon, which is more relevant than today's 3yr version…(read more)

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