MBS RECAP: Mixed Messages as Bonds Sell-Off

Posted To: MBS Commentary

Coming off of yesterday's excellent performance, today's bond market selling-spree felt jarring –probably more jarring than it actually was. Right off the bat, consider that yesterday afternoon saw a very late improvement in both Treasuries and MBS. This improvement set a high bar for today's "day-over-day change." You can see this in the following chart as the MBS prices that trade over the teal line. That late rally didn't result in any appreciable surge of reprices, so why not throw it out as a critical component of the 2-day outlook? That gets us more than halfway back to "unchanged on the day." From there, we can consider that MBS prices never went below yesterday afternoon's lows (red line in the chart above). As such the takeaway is that mortgage…(read more)

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Source: Mortgage News Daily

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