MBS RECAP: Overwhelmingly Slow Today, Auctions Ahead


Move along, there’s nothing to see here… Really… At this point, today’s volume in several sectors is on pace to be the lowest of the year. Like an unfinished, unpainted 2×4, MBS and Treasuries have been flat, boring, and rigid in their sideways support.

MBS continue to favor a range of 103-18 to 103-21 but have held closer to the higher end on average. 10yr yields have bounced around ever-so-slightly in a 2.02 to 2.04 range. Yields ran up into the 1pm hour and almost looked like they would do something interesting, but quickly retreated back into the range.

There’s been another slight uptick in yields over the past few minutes, with 10’s rising to 2.035, but really, volume is so low we’re not going to pay any attention unless yields are at, say, 2.045, and moving higher in high volume.

As far as MBS are concerned, we’d need to see prices below 102-17 in increasing volume before reading too much into it. Right now, we’re on pace for the lightest volume full trading day of the year. Today is really more like the last day of a long weekend, or the early hours of Tuesday’s overnight session. Even then, the interesting data and events don’t really get underway until Wednesday.

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