How Meaningful is Post-Fed Rate Resilience?

2 days, 2 rallies following Wednesday’s Fed-induced selling spree.  Is this a sign of bigger-picture ground holding potential?  The short answer is “probably not, but anything’s possible.”  The longer answer is in today’s recap video.

Econ Data / Events

Fed MBS Buying  10am, 11:30am, 1pm

Core PCE Inflation y/y ……4.9 vs 4.8 f’cast, 4.7 prev Employment Cost Index…..1.0 vs 1.2 f’cast, 1.3 prev Consumer Sentiment ………67.2 vs 68.7 f’cast, 68.8 prev

Market Movement Recap

08:36 AM Weaker overnight, more so in Europe.  10yr was 4bps higher at the open, but half the losses are erased after the 8:30am econ data (no inflationary whammies).  Currently up 2bps at 1.823 and MBS down an eighth of a point at 101.875.

12:23 PM Nice little rally starting at 9:30am.  Bonds now in positive territory.  10yr down 2bps at 1.784 and 3.0 coupons up 3 ticks (0.09). 

02:49 PM Close enough to the best levels of the day to say bonds are hitting the 3pm close at their best levels of the day.  VERY calm trading session after AM rally.  Treasuries mostly flat since 11am.  MBS edging just slightly stronger.  10yr yield down 2.5bps to 1.778.  UMBS 3.0 up just over an eighth of a point.
Source: Mortgage News Daily