MBS Live Recap: Big Sell Off After a Nice Rally. Blame The Fed Either Way?

Thu, May 5 2022, 4:40 PM

Big Sell Off After a Nice Rally. Blame The Fed Either Way?

Today was one of many uncommon breed the place each shares and bonds made huge strikes with none indeniable, overt, new justification.  It was a gradual, methodical transfer by intraday requirements.  It got here on slowly at first, accelerated into the crux of AM liquidity hours, and light within the afternoon.  While we will level to 1 or two particular person concerns, none of them are as much as the duty of explaining swings of this dimension.  It’s solely once we step again and contemplate  the complete 24 hours of buying and selling that we will (form of) body all the things that occurred within the context of an preliminary and secondary response to yesterday’s Fed announcement and press convention. 

  • Fed MBS Buying 10am, 11:30am, 1pm

  • Jobless Claims 200k vs 182k f’forged, 181k prev

08:43 AM

blended in a single day.  Early modest weak spot gave solution to a pleasant bounce after BOE announcement.  10s and MBS are each simply barely stronger.

10:24 AM

Quick unload beginning simply after 9am and accelerating after the 930am NYSE open.  Corp bond issuance and post-Fed-Day revenue taking in play.  Oil’s been talked about, however it simply fall again to AM ranges with no response in bonds, so…  10yr is up 10bps at 3.046.  4.0 UMBS are down greater than half a degree.

11:52 AM

Another leg of promoting and extra new long-term highs for yields.  Stocks are tanking too.  10yr up 15bps at 3.096.  MBS down virtually 3/4ths of a degree.

03:18 PM

Losses discovered help heading into 2pm.  There was a bit of shopping for after that, however not sufficient to set something other than a sideways tone.  MBS down just below 3/4ths of a degree.  10yr up 12bps at 3.066.

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