MBS Live Recap: Ceiling Looking Too Low After ISM Data Reaction

Abstract

Ceiling Looking Too Low After ISM Data Reaction Yields may have failed to break below a floor of 2.72% last week, but they still had a chance to hold a ceiling of 2.88% this week. At least, they HAD that chance until today's ISM Manufacturing data. Bonds sold off quickly after that, with 10yr yields topping out at 2.951. Fed Funds Futures suggested the market viewed the data as fresh evidence that the Fed needed to remain aggressive in removing policy accommodation. 10yr up 2.9bps at 2.88 and 4.0 UMBS down just over an eighth of a point. 10yr up almost 8bps to 2.926 and MBS down almost half a point on the day. 10yr yields up 7.3bps at 2.922 and MBS down just over 3/8ths of a point.