MBS Live Recap: Big Bond Rally to Start The New Week

Mon, May 9 2022, 3:49 PM

Big Bond Rally to Start The New Week

In spite of potential headwinds within the coming days (CPI knowledge and Treasury auctions, particularly), bonds are off to the races to this point this week.  That wasn’t destined to be the case within the in a single day session as 10yr Treasury yields hit new long-term highs of three.20%, however issues solely improved from there.  Another massive drop in shares helped gas some safe-haven demand.  Lower oil costs did not damage.  We may take into account that Friday’s weak point might have been extra about position-squaring than a real impulse to promote bonds.  Lastly, the abundance of brief short-covering triggers and add to the bullish momentum.

  • Fed MBS Buying 10am, 11:30am, 1pm

  • Wholesale Inventories 2.3 vs 2.3 f’forged, 2.3 prev

09:19 AM

Initially weaker in a single day, however again in optimistic territory this morning (simply barely).  MBS might not look inexperienced at any given second, however that ought to change when liquidity improves.

12:25 PM

Big AM rally continued by means of 11:30 earlier than discovering resistance.  10yr down 4.7bps at 3.095 and UMBS 4.0 coupons up 11 ticks (.34) at 99-01 (99.03).

03:39 PM

Bonds proceed to surge with shares at lows, oil tanking, and late day liquidity including emphasis as extra accounts are pressured to cowl brief positions.  10yr down 11bps at 3.034 and MBS up virtually half a degree.

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