Today's
Rate Volatility: HIGH
What happened yesterday?
Mortgage backed
securities (MBS) gained +6 basis points (BPS) from Tuesday's close (Wednesday
the market was closed) which caused 30 year fixed rates to move sideways.Our FNMA 4.0 January coupon traded in a very narrow range all day that was only 13BPS wide from our highs to our lows. As a result, most of you saw no change in your pricing all day.
Initial Weekly Jobless Claims were lighter than market expectations (338K vs est 345K) which is generally negative for bonds. But tempering that good economic data is a lot of confusion over the seasonal adjustments and the fact that Continuing Jobless Claims rose. This caused MBS to just move sideways.
There were no other economic releases, Treasury auctions or Talking Feds to guide pricing for the rest of the day.
The closely watched 10 year Treasury yield did briefly trade above 3.00% but couldn't sustain it and once again retreated. As we have discussed, once it actually closes above 3.00%, MBS will be under pressure.
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