Bond Buyers on Strike Until They Hear From The Fed

There were a few way the run up to this week’s Fed announcement could have gone.  One of them involved the market realizing that it had sufficiently priced in an unfriendly eventuality and thus leveling off–possibly leading off back in a friendly direction–over the first two days of the week.  The other involves buyers simply refusing to chase yields any lower until they have the certainty they’re looking for.  We got the latter.

Econ Data / Events

Builder Confidence 

46 vs 47 f’cast, 49 prev

Market Movement Recap

09:14 AM Sharply weaker at the open with 10yr yields hitting new long term highs at 3.518.  Recovering fairly well since then (up only 2bps at 3.475), but MBS remain more than a quarter point weaker on the day.

11:11 AM Quick selling spree into the 930am NYSE open, but recovering since then.  MBS now down only 5 ticks (.16) and 10yr back to 3.465 (up only 1bp).

01:21 PM Little-changed from previous update.  MBS and Treasuries consolidating.  No new market movers.

03:33 PM Weakest levels of the day for MBS, btu driven primarily by illiquidity.  4.5 coupons down roughly 5/8ths.  10yr yields up 3.7bps at 3.492.  
Source: Mortgage News Daily