Today's
Rate Volatility: NEUTRAL
What happened yesterday?
Mortgage backed
securities (MBS) gained +6 basis points from Wednesday's close.
The benchmark FNMA 4.0 October coupon once again traded in a very narrow
range that was only 25BPS wide from our intra-day highs to our intra-day
lows.
Initial Weekly Jobless Claims came in at 292K vs est 330K - this would have
been VERY NEGATIVE for your rates if it was accurate. But
there was a statement by the Labor Department that claimed the numbers
are understated due to two states not reporting correctly.
According to the Labor Department those two states were upgrading their
computers and couldn't report on time. MBS did move off of their early
morning highs on this news but the sell off would be much bigger if these
numbers were accurate and below 300K.
We had a 30 year Treasury bond auction. The results were released at
1:05EDT: $13B, 3.820%/Bid-to-cover 2.40 vs its recent avg of 2.51
This was not as strong as yesterday's 10Year Treasury Note auction and MBS
were pressured lower as a result.
We once again tested our 10 day moving average. And once again it held,
driving pricing lower (worse pricing for you) after failing to close above
it.
What is on the agenda for today?
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