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MBS RECAP: Too Strong to Give Up Hope. Too Weak to Rest Easy

Posted To: MBS Commentary

Too Strong to Give Up Hope. Too Weak to Rest Easy – New week, new month, new chance for yields to confirm a ceiling after last week's rout – Mixed results for bonds today with early weakness and a late bounce (especially for MBS) – Very poor liquidity in MBS (buyers and sellers oftentimes FAR apart on their desired prices) – 100% focus on UMBS 2.5 coupon (why?) – Bottom line: not enough weakness to give up hope. Not enough strength to rest easy. Econ Data / Events Fed MBS Buying 10am, 1130am, 1pm ISM Manufacturing 60.8 vs 58.8 (ties highest level since 2004) ISM Prices Paid 86.0 vs 80.0 Construction Spending 1.7 vs 0.8 f'cast Market Movement Recap 08:53 AM Flat in Asia then moderately weaker in Europe. 10yr low = 1.38%. Highs of 1.456% this morning, but already pushing back down (1…(read more)

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