Ready to go higher without much stimulus 1 hour 26 mins wanting to go higher without much stimulus Bonds had a nice day of gains after a mixed performance in the morning economic data. Unemployment claims made the case for rising rates. Producer prices have risen. Based on the precedents of each report, you wouldn’t be wrong to expect this to be more than a 10 basis point drop in Treasuries and a half point rise in MBS, but that’s what we got. but why? We’ll be able to piece this together better in the coming days, but the reasoning ranges from European influences and the “excessive sell-off last week” to a legitimate sense that some big side has flipped in the fight against inflation. We can also bring up ‘supply’ considerations as the markets have just nailed it with this week’s Treasury auctions as well as quite a few corporate bond offerings. Producer Prices for Unemployment Claims, Core m/m 0.1 vs. 0.2 f’cast, 0.2 ex-Product Prices, Core y/y 2.4 vs. 2.6 f’cast, 2.8 ex-08:36 a.m. Slight decline after claims data. 10 years down 2.3 bps at 3.84 and MBS just over an eighth of a point. 11:50 AM Additional gain after initial hesitation. MBS is up 3/8 and the 10-year is up 6.6 bps at 3.797. 02:52 PM More gains in the PM. There was little reaction to the 30-year bond auction. 10 years down 10 points at 3.765. Mohammed bin Salman by almost half a point. Download our mobile app to get alerts on MBS Suspension, MBS Stream and Treasury Rates.
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