Posted To: MBS Commentary
Trading has been surprisingly reactive to data this morning with stronger CPI resulting in an obvious selling spree. Up until that point, bond markets were stone silent right through the overnight session. That was especially true during Asian hours. From there, Europe didn’t add any volatility, but a gentle bond market rally made for an even gentler version in Treasuries. By the start of the domestic session, 10yr yields were down to 2.17 after closing at 2.195 yesterday. Fannie 3.0s were back up to 101-04 and 3.5s up to 104-10. Despite only a modest beat in CPI ( core +0.3 vs +0.2 forecast), bonds sold quickly at 8:30am. This brought 10’s up to 2.226 and Fannie 3.0s down to 100-25, making for a quarter point loss on the day. There was another glut of weakness at 10am–this time for…(read more)
Via:: MBS MID-DAY: Strong Start Reverses after CPI; Yellen up Next
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