Today was the most active trading day of the week–something that looked destined to be the case considering markets began gyrating right at the start of the Asian session. The initial volatility came in response to the announcement of another $200 bln in US Tariffs on Chinese goods. Logically, stocks lost ground and bonds rallied.
After hitting the apex of that move before Europe even got out of bed, stocks and rates began inching higher as if to say “we’ve done this dance before and we’re not going to freak out as much this time.” That sentiment was rewarded by stronger data on wholesale inflation (PPI at 8:30am). Bonds weakened a bit more and stocks continued to rally.
The next key consideration for bonds was the 1pm 10yr Treasury auction, which went well, but only after 10’s had weakened enough to make prices enticing for bidders. The strong results helped yields hold under the day’s previous ceiling. In the afternoon, there were two quick spats of volatility–apparently related to tradeflows and positioning. A few analysts mentioned a short-squeeze just after the 2pm mini-rally, but importantly, all of it occurred within the confines of the prevailing (and narrow) sideways range.
MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
101-29 : +0-05
2.8400 : -0.0330
|Pricing as of 7/11/18 5:58PMEST|
Today’s Reprice Alerts and Updates
1:42PM : Slightly Strong 10yr Auction Leaves Bonds Little-Changed
8:50AM : Overnight Gains Fade After Stronger PPI
MBS Live Chat Highlights
Mike Owens : “take monthly P&I divide by 12 and pay the extra each month and accomplish the same.”
Sung Kim : “in addition, you can just have them add 1/12th of a payment to each monthly mortgage payment”
Sung Kim : “just tell your client to make one extra payment at the beginning of every year which would be superior to bi-weekly”
BFF Mortgage : “anyone know a correspondent who allows clients to make bi weekly payments? provident, homepoint, santander, jmac all no”