MBS Week Ahead: Auctions and Inflation Data in Focus

Posted To: MBS Commentary

In terms of scheduled data and events, this week is much lighter than last. It will also be more susceptible to the effects of light liquidity as market participants will increasingly be out of the office through Labor Day. While the latter means that some of the movement we see should be taken with a grain of salt, we should nonetheless expect at least some sort of verdict from a few of the week's more important events. Chief among these is the 10yr Treasury auction on Wednesday. This isn't our typical market mover because, indeed, it may not prove to move markets at all. But because of the newly increased size of the auction and the recently higher trading levels, it has the chance to serve as confirmation that bonds are trading where they want to trade or to imply something else...(read more)

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