By this time yesterday, MBS had already moved up 3/8ths of a point from morning lows. Activity is muted by comparison today. Movement has been in the other direction, but although prices are an eighth of a point off their highs, they’re still an eighth of a point better than yesterday’s latest levels.
That’s somewhat positive, but in actuality, we can only say that MBS are positive versus yesterday’s latest levels due to yesterday’s afternoon weakness. Bottom line: prices are still in the same afternoon range from yesterday, having gone no higher than early afternoon highs or late afternoon lows.
Treasuries managed to improve on yesterday’s gains just slightly, but are also back in yesterday afternoon’s range. Ebbs and flows in stocks have been the key informant for bond market decisions so far. When stocks broke higher into the 11am hour, bonds moved into negative territory, but that move has since been reversed. The prospects for another down day in stocks are keeping Treasury gains alive. This won’t always be the case when it comes to the relationship between stocks and bonds, but it’s today’s primary consideration so far.