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MBS RECAP: Weakness and Consolidation as Bonds Wait For Stimulus

Posted To: MBS Commentary

Weakness and Consolidation as Bonds Wait For Stimulus This week began with a decisive breakout to higher yields in the bond market. Stimulus negotiations have been in focus and some sort of deal remains totally guaranteed, but with unknown timing and magnitude. Bonds braced for that reality by moving weaker and then narrowly sideways as the week progressed. Volatility could be relatively more contained until we get more clarity on stimulus. Econ Data / Events 20min of Fed 30yr UMBS Buying 10am, 1130am (M-F) and 1pm (T-Th) Wholesale Inventories 0.4 vs 0.5 f'cast , 0.5 prev Market Movement Recap 08:58 AM Stocks were essentially flat overnight while bonds mostly rallied until domestic trading got underway in the US. After the early selling pressure, both Treasuries and MBS are unchanged versus…(read more)

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