MBS Live Recap: Another Solid Day, But It’s All About Wednesday’s CPI

Tue, May 10 2022, 3:57 PM

Another Solid Day, But It’s All About Wednesday’s CPI

Bonds managed to publish a 2nd consecutive day of features on Tuesday–a feat seldom seen in 2022 other than the preliminary flight to security in the beginning of the Ukraine battle.  Actual motivations for the features are as exhausting to justify because the motivations for the sell-off final Friday.  One appears to be like like a correction to the opposite.  If compelled to call names, we would level to tempered feedback from a number of Fed audio system together with Williams, Mester, Barkin, and Waller.  All sang related tunes concerning the close to time period sport plan of a number of 50bp hikes adopted by “data dependency.”  On that observe, a lot will depend on Wednesday’s CPI report to offer us essential affirmation or rejection of the potential inflation plateau that started to take form over the previous 2 studies.  The wild card is the chance of early fallout from current commodity value spikes.

08:37 AM

Stocks bounced in a single day, however EU bonds led a rally towards decrease yields and Treasuries adopted.  Early home buying and selling persevering with the momentum.  10yr down 6+ bps at 2.969.  MBS up 1 / 4 level, however nonetheless illiquid (could possibly be up much more by the point issues settle.

12:09 PM

After a short bounce early, bonds are again close to the day’s greatest ranges with 10s down 8.4bps at 2.95% and MBS up half some extent.  Stock losses and declines in oil costs are in play for a 2nd straight day.

01:21 PM

Some volatility surrounding the 3yr public sale, however largely pushed by illiquidity in MBS.  4.0 coupons nonetheless up 3/8ths.  10yr nonetheless down 7.4bps at 2.96%

03:55 PM

A little bit of weak spot within the PM hours, but it surely’s been pretty linear and orderly.  MBS nonetheless up nearly 1 / 4 level and 10yr yields nonetheless down nearly 4bps at 2.997.

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