Tuesday, 18 February, 2020

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MBS RECAP: Friendly Confluence of Events Helps Bond Markets Repair Some Damage

Last week brought the pain.  It was the worst single week for the bond market (if we count MBS) since 2013.  Although this week won’t break any records, it was a refreshing change of pace, with almost every day seeing decent improvement.  

Today’s gains were the best, but also the most serendipitous.  A seemingly insignificant headline about Chinese delegates cancelling a trade meeting with Montana’s agricultural bureau sent shockwaves through both sides of the market.  Those headlines were flanked by newswires with market-friendly Fed speakers (Clarida and Bullard).  Finally, the 3pm CME close brought a friendly imbalance (in our favor) in tradeflows surrounding the monthly options expirations deadline.  This is the sort of thing that can help us or hurt us.  Today it helped.

Next week brings a tad more economic data but nothing too serious until the end of the week.  Still, traders will take any economic update they can get considering Powell just said the next 6 weeks of data will be critical in refining and shaping the Fed’s policy path.

MBS Pricing Snapshot

Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.


101-11 : +0-11

Treasuries 10 YR

1.7210 : -0.0530

Pricing as of 9/20/19 6:14PMEST

Today’s Reprice Alerts and Updates

3:54PM  :  Bonds Surging at Close on a Friendly Combo of Events

11:29AM  :  MBS at Best Levels as Bonds Grind Sideways

MBS Live Chat Highlights


John Tassios  :  “First this around noon: “U.S. lifts tariffs on 400 Chinese products, Trump cites trade progress”, then this early afternoon: “Chinese trade negotiators cancel US farm visit, cut trip short”. China pull a fast one on POTUS? or just coincidence?”

Matthew Graham  :  “newsletter hitting now. It’s probably the single best thing I’ve written to break down the Fed vs Mortgage rates for inquisitive consumers. Feel free to email me with edit suggestions though. It won’t change what’s going out on the automated version, but it would for those who use the PDF feature.”