MBS Live Recap: How Low Can Stocks Go? (Bonds Want to Know)

Thu, May 19 2022, 4:48 PM

How Low Can Stocks Go? (Bonds Want to Know)

Bonds improved in a single day and once more after this morning’s Philly Fed information (a darkish horse market mover to make sure).  10yr yields hit their lowest ranges in 3 weeks, and at one level had been nearly 40bps beneath the highs of three.2% seen 2 weeks in the past.  Bonds might have already been destined to reject 3.2% and recuperate, however there is not any query that the heavy promoting in shares has actually accelerated the recovery–so a lot in order that we have to surprise how sustainable it’s within the occasion that shares discover their footing.  Without the inventory market affect, it is cheap to assume bonds would nonetheless be extra sideways in comparison with the previous few months primarily based on information and occasions, however “more sideways” does not essentially portend further enchancment.  

  • Fed MBS Buying 10am, 11:30am, 1pm

  • Housing Starts 1.724 vs 1.765m f’solid, 1.728m prev
    Building Permits 1.819 vs 1.812m f’solid, 1.879m prev

08:47 AM

Initially weaker in a single day.  Big rally in Europe.  Stocks sliding once more (not as a lot as y’day up to now). Bonds liking the weak Philly Fed information.  10yr down over 9 bps at 2.79.  MBS up 3/8ths of a degree.

12:15 PM

Treasuries trending gently weaker since 9:30am.  MBS have been extra sideways but in addition coming off highs.  10yr down 4.2bps at 2.842 and 4.0 coupons up solely 10 ticks now (.31).

01:44 PM

MBS nonetheless within the day’s vary, however close to the decrease boundary, down greater than eighth from highs.  10yr yields grinding steadily/calmly increased, now down solely 3.3bps on the day at 2.852.

04:03 PM

Treasury yields at highs, however buying and selling stays uneventful.  Still in keeping with ranges from the final replace.  MBS are holding regular with positive aspects of 0.31

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