Nice Push Back Against Tuesday’s Weakness. ECB On Deck

Tuesday was brutal and the only real explanation for the extent of the weakness was the covered in more detail in today’s opener).  Today’s trading session managed to undo a fair amount of that weakness, essentially getting yields in line with last week’s worst levels.  MBS were more than 3/8ths of a point higher by 4pm and 10yr yields had dropped 8bps.  The reversal of the weakness is “nice” for now, but it doesn’t guarantee a reversal.  For that, we would need a favorable reaction to Thursday’s ECB announcement and in the slightly bigger picture, a friendly CPI report next week.

Econ Data / Events

no significant data

Market Movement Recap

08:56 AM Flat overnight during Asian market hours, then modestly stronger during European hours.  Holding small gains to start.  10yr down 3bps at 3.325% and MBS up an eighth.

12:21 PM Additional gains, mainly in the 9am hour for Treasuries, but trickling to stronger levels now.  10yr down 7+ bps at 3.279.  MBS up 3/8ths of a point.

02:06 PM Additional gains in the PM hours, especially after EU bonds closed for the day.  Corporate rate lock buybacks and Fed speakers are helping.  10yr down almost 10bps to 3.256.  MBS up nearly half a point.
Source: Mortgage News Daily