Treasuries Thunder Back To Positive Territory; MBS Underperform

Thu, Jun 16 2022, 4:23 PM

Treasuries Thunder Back Positive Territory; MBS Underperform

This morning’s headline steered a sideways, risky vary remained intact regardless that bonds misplaced a big quantity of floor within the in a single day session.  In reality, 10yr yields briefly matched the latest highs (from Tuesday) earlier than stabilizing.  The late AM hours have been excellent for Treasuries and pretty good for MBS.  Both remained sideways as simply barely weaker ranges.  Late day buying and selling noticed fast place squaring in Treasuries, each forward of a vacation weekend and in response to heavy inventory losses.  With that Treasuries moved properly into constructive territory and MBS got here shut.

  • Swiss National Bank (SNB) surprises markets with a price hike
    Bank of England (BOE) hikes as anticipated, barely hawkish assertion
    Jobless Claims 229 vs 215 f’solid, 232 prev
    Philly Fed -3.3 vs 5.5 f’solid, 2.6 prev
    Philly Fed 6-mo outlook lowest since 2008

09:02 AM

heavy losses in a single day on SNB hike and hawkish BOE.  10yr up 10.7bps at 3.4.  MBS down 5/8ths of a degree.

11:03 AM

Some weak point heading into 10am hour and now bettering as shares tank.  10yr nonetheless up 5bps at 3.345.  MBS down half a degree at 99.0, however up greater than half a degree from lows. 

02:51 PM

Fairly flat throughout the mid-day hours with MBS buying and selling a sideways vary roughly 3/8ths decrease on the day.  Same story for 10yr yields roughly 2bps larger on the day.

04:12 PM

Big transfer decrease in yield after the 3pm CME shut and forward of 4pm NYSE shut.  Short-covering is an element, as is inventory market weak point.  10yr yields now DOWN 4.5bps at 3.246 and MBS down solely 7 ticks (.22).  

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