There’s a fairly strong case to be made for stock market weakness helping bond yields remain lower than they otherwise might be in September.  As such, we’ll be watching the bond market’s reaction very carefully in the event of a rebound.  Stocks notwithstanding, MBS are coping with higher supply (more locks from originators), which is making it hard for MBS to keep up with gains in Treasuries.

Econ Data / Events

Market Movement Recap

08:28 AM

Bonds were closed during Asian hours, but futures trading was flat.  The European session brought modest weakness that mostly lined up with resilience in equities.  10yr Yields are roughly unchanged to start and 2.0 UMB are up 2 ticks  (0.06).

12:37 PM

Bonds have been up a bit, down a bit, and sideways a lot.  Comments from Fed speakers–while interesting in some cases, haven’t had an impact.  In fact, there’s really no discernible trading theme for the day.  MBS are at their highs, up 0.09 at 103.03 (+3 ticks at 103-01) and 10yr yields are unchanged at .6691.  Stocks are technically up just a bit, but effectively flat since 6am.

04:31 PM

Nothing new to report as the day’s sideways drift persisted through the close.  UMBS 2.0 trading has been very thin, and although prices were briefly as low as 102-30 (102.94), they’re back up at 103 heading into the close.