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MBS RECAP: Is The Rally Meeting Resistance or Just Consolidation?

Posted To: MBS Commentary

Is The Rally Meeting Resistance or Just Consolidation? With modest overnight weakness and a small negative reaction to this morning's headlines (ADP and Treasury issuance), bonds may be encountering some more resistance on their journey toward lower yields and higher prices. Is this a meaningful signal or just incidental consolidation? Econ Data / Events 20min of Fed 30yr UMBS Buying 10am, 1130am (M-F) and 1pm (T-Th) ADP Employment 167k vs 1.500m f'cast , 4.314m prev ISM Services 58.1 vs 55.0 f'cast , 57.1 prev Market Movement Recap 08:37 AM 10yr yields aren't panicking, but they're up roughly 3.5bps on the day at .546 after a strong ADP revision and big increase to Treasury issuance. As expected, MBS are outperforming amid general bond market weakness with 2.0 coupons down…(read more)

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