MBS RECAP: Not Too Shabby, Considering The Hurdles

Posted To: MBS Commentary

10yr yields fell 1.4bps today and Fannie 3.0s ended the day 3/32nds better in price. Those stats could describe any bland, uneventful day for bond markets, but today was anything but. The modest gains only end up describing today because that's where we happened to land after a rather wild ride. Moreover, even if there had been no intraday volatility, it would still have been quite an accomplishment for bonds to make any gains given the headwinds. In today's case, the headwinds were supply-related. "Supply" refers to new bonds--things like Treasuries, MBS, and corporate debt being sold by sellers and bought by buyers. There are a lot of sellers this week, and especially today, considering the biggest-ever corporate bond was launched ($46 billion in US dollars with additional...(read more)

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