Yields Recover After New Long-Term Highs Overnight

Treasury yields rose to new long-term highs during the first hours of the overnight session as Japan announced a plan to buy unlimited domestic debt (thus leaving less bond buying demand for foreign markets, including Treasuries).  Things changed in Europe with Treasuries bouncing back to lower yields right at the EU open.  Steady gains continued into the 10am hour and leveled off sideways after that.  A downtrend in oil prices helped via inflation implications.  MBS were flat to slightly stronger with the best gains in the late afternoon.

Econ Data / Events

Fed MBS Buying  10am, 11:30am, 1pm

Market Movement Recap

08:47 AM Weaker oil and lower EU bond yields overnight.  Fresh yield highs of 2.557 brought in buyers.  10yr now down 4.6bps at 2.442 and MBS up an eighth of a point.

02:36 PM Super flat most of the day apart from a quick dip in yield after 10am and a return to AM levels shortly thereafter.  10yr near highs of the day, down 1.8bps at 2.47.  UMBS 4.0 nearly unchanged and 3.5 coupons are up 2 ticks (0.06). 

03:51 PM Slightly more resilience now as oil prices fell more sharply in the afternoon.  More noticeable gains in MBS which are back to the highs of the day, up an eighth in 4.0 coupons and nearly a quarter in 3.5 coupons.
Source: Mortgage News Daily