Friday’s strong jobs report certainly deserves some credit for increasing the risk that the Fed will consider an earlier timeline (as early as the September meeting if we see another similar report next time around). But “another similar report” is not obvious. Great uncertainty remains due to the current peak of covid and abnormal seasonal employment patterns viewed through the prism of normal seasonal adjustments. Nonetheless, the drop in the unemployment rate must be respected and we must be prepared to assess whether bonds seem more interested in a sideways, “wait and see” approach next week or if today was only the first day of the week. ‘a bigger picture. to burst.
Purchase of MBS from the Fed 10 a.m., 11:30 a.m., 1 p.m.
NFP 943k vs 870k f’cast, 938k prev
Unemployment 5.4 vs 5.7 f’cast, 5.9 prev
moderately and steadily lower at night in higher than normal volume. The movement was very linear, with no major reactions to individual events, thus suggesting more squaring of pre-NFP positions. 10-year yields rise 2.5bp to 1.25% and MBS fall by almost an eighth of a point.
Post-NFP selling hit the support cap at 1.29 and has stagnated since then. Bonds could consolidate for another higher yield movement, but we have to wait and see. The MBS remains stable 6 ticks lower (-0.19).
Treasuries are still trying to hang on to the 1.29% cap (or close to it), but MBS have leaked lower. 2.0 coupons to new lows, down nearly 3/8 on the day and more than an eighth from the hourly rate sheet.
Nothing that happens in the last hour will really matter on the whole. Bonds effectively held sideways at the day’s weaker levels throughout the afternoon. MBS are down 3 / 8th and 10-year yields are up 7.4bp to 1.299%.
MBS price overview
Prices shown below are delayed, please note the time stamp at the bottom. Real-time pricing is available through MBS Live.
|Price at 08/06/21 15:56 PMEST|
Today’s Re-pricing Alerts and Updates
12:23 : ALERT ISSUED: Slight increase in risk of negative revaluation (despite TSY’s resilience)
11:03 : ALERT ISSUED: Slippage of MBS; Risk of re-pricing varies
8:33 : ALERT ISSUED: Non-farm wages are crushing it; Fugitive bonds
MBS Live Chat Highlights
Timothy Baron : “Okay, MBS. How about a bounce? “