MBS RECAP: Bonds Taking Another Run at 2017’s Best Levels?

Unfortunately, we won’t really know until after this week is over, but if today is any indication, bond markets look like they’re willing to consider another run at the best levels of 2017.  10yr yields made it as low as 2.21% today, a mere 4bps higher than the important 2.17% technical level seen in the days following the US presidential election (yields created a “gap” by closing at 2.15% on Nov 10th and opening at 2.17% on Nov 14th–such gaps are considered significant from a technical perspective).

Today’s strength wasn’t apparent from the outset.  Although bonds did pick up some ground during the overnight session, the initial reaction to the 8:30am economic data took us right back in line with Friday’s latest levels.

The weakness was short-lived.  Treasuries led the way back to the morning’s best levels even before equities markets opened.  From there, bonds remained unphased by developments in other markets–something that is not uncommon on the last few days of the month where bonds can be influenced by month-end tradeflows.

While this doesn’t guarantee strength tomorrow, today’s strength has at least opened up a few overhead lock triggers for more risk-tolerant clients.  These were discussed in greater detail for MBS Live members in “the huddle” (a video and bullet-point update with all the day’s relevant market-movers and lock/float considerations).  MBS Live members can make sure they’re subscribed to huddle notifications HERE.

MBS Pricing Snapshot

Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.

MBS
FNMA 3.5
103-08 : +0-06
Treasuries
10 YR
2.2080 : -0.0420
Pricing as of 5/30/17 4:46PMEST

Article provided by: mortgagenewsdaily.com

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