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MBS RECAP: Important Victory For Bonds, and Another Battle Ahead

Posted To: MBS Commentary

Important Victory For Bonds, and Another Battle Ahead Rates rallied today. Despite a positive reaction to a strong 30yr bond auction, it looks like traders made their minds up to be buyers well before that. The rally greatly improves the odds that 10yr yields are finding a supportive ceiling in the 1.1-1.2% zone. The show of support is still a bit tentative to rest easy, but things certainly could have been worse over the past two days. Some traders are still waiting to see what Biden has to say about stimulus tomorrow (and more importantly, whether they think moderate democrats will be in support). Econ Data / Events 20min of Fed 30yr UMBS Buying 10am, 1130am (M-F) and 1pm (T-Th) Core Annual CPI 1.6 vs 1.6 f'cast, 1.6 prev Market Movement Recap 08:10 AM Fairly calm overnight session–especially…(read more)

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