The sale of snowballs continues. Why? (updated video)

MBS live recap: The snowball sale continues. Why? (updated video)


1 hour, 12 minutes ago

In a nutshell, most of the rate dramas seen over the past 3 weeks are the result of a fairly significant policy pivot on the part of the Fed. There were no new communications from the Fed today, but some market participants were still responding to a slew of Fed speakers from Friday. These responses were compounded by fear and uncertainty as the Fed is now in its blackout period ahead of next week’s announcement (no public policy speeches within 11 days of an announcement). Left to their own devices, traders were free to panic.

  • Buy MBS from the Fed 10 a.m., 11:30 a.m., 1 p.m.

  • NY Fed Manufacturing……….. -0.7 vs 25.0 f’cast, 31.9 prev
    NAHB Builder Confidence…….. 83 vs 84 f’cast, 84 prev


Big losses in big volume overnight. Yields opened near 1.85% and fell to 1.82 (still nearly 3 basis points lower on the day). MBS are down a quarter point.


After initial stability, bonds are back on the defensive. 10yrs up new highs for the day, +6bps to 1.854. UMBS 3.0 down almost 3/8 of a point.

2:31 p.m.

The losses continued until 1pm and we have seen a small resistance since then. 3.0 UMBS have lost more than half a point, but are now down just under half a point. 10-year yields rose 5.5 basis points to 1.848.

3:05 p.m.

Resilience evaporated as the CME closed at 3 p.m. New high yields for the 10s and new daily lows for the MBS.

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