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MBS RECAP: Today’s Weakness Made Sense? Great… So Now What?

Posted To: MBS Commentary

Perfect Storm in Bonds Pushing Yields Quickly Higher Between the 5-day rally running the risk of getting tired, the technical resistance at .63%, the artificial extension of the rally thanks to huge stock selling, and the upcoming 3-day weekend, it made significantly more sense to err on the side of caution yesterday. Now today, we see just how true that was. Underlying sources of strength remain, so it will be very interesting to see how eager bond buyers are to push back next week. Econ Data / Events 20min of Fed 30yr UMBS Buying 10am, 1130am (M-F) and 1pm (T-Th) Nonfarm Payrolls 1.371m vs 1.4m f'cast , 1.734m prev Unemployment Rate 8.4 vs 9.8 f'cast , 10.2 prev Participation Rate 61.7 vs 61.4 prev Market Movement Recap 08:14 AM Bond yields were sideways to slightly higher in the…(read more)

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