MBS RECAP: A Flat Trading Day That Felt Like a Big Win

Posted To: MBS Commentary

Bond markets managed to scrape together a day-over-day improvement by a very small margin. 10yr yields closed 1.6bps lower and Fannie 3.5s gained a paltry 1/32nd of a point. That isn’t the sort of thing that would typically be exciting to mortgage market participants, but many will make an exception today. First off, the day began with overnight trading levels pushing right up against the highest recent yields. 10yr Treasuries hit the important 2.30% technical level (2.297, officially) and were only starting to bounce lower as US markets opened. That meant traders began their day looking at 7bps of new losses, or 3/8ths of a point of losses in MBS prices. That “low bar” is why today ultimately got exciting. Buyers showed up in pretty good volume to reign in yields. 10s dropped…(read more)

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