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MBS Live Recap: Bonds Surprised by Supply Even Though They Knew Supply Was Coming

MBS Live Recap: Bonds Surprised by Supply Even Though They Knew Supply Was Coming

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MBS Live Recap: Bonds Surprised by Supply Even Though They Knew Supply Was Coming
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MBS Live Recap: Bonds Surprised by Supply Even Though They Knew Supply Was Coming
MBS Live Recap: Bonds Surprised by Supply Even Though They Knew Supply Was Coming
MBS Live Recap: Bonds Surprised by Supply Even Though They Knew Supply Was Coming
MBS Live Recap: Bonds Surprised by Supply Even Though They Knew Supply Was Coming
News & media website News & media website | 1 year ago
Bonds Surprised by Supply Even Though They Knew Supply Was Coming Whether in reference to the regularly scheduled Treasury auction cycle or the variable pipeline of corporate bond issuance, the notion of "supply" played a key role in today's bond market weakness. How does that happen when bonds know they're going to see supply ahead of time?ย  The biggest reason is precisely that "variable" nature of the corporate pipeline.ย  Bottom line, it turned out to be way more than expected.ย  The issuanc...
Bonds Surprised by Supply Even Though They Knew Supply Was Coming Whether in reference to the regularly scheduled Treasury auction cycle or the variable pipeline of corporate bond issuance, the notion of "supply" played a key role in today's bond market weakness. How does that happen when bonds know they're going to see supply ahead of time?ย  The biggest reason is precisely that "variable" nature of the corporate pipeline.ย  Bottom line, it turned out to be way more than expected.ย  The issuanc...
MBS Live Recap: Abnormally Uneventful Friday For Bonds
MBS Live Recap: Abnormally Uneventful Friday For Bonds
MBS Live Recap: Abnormally Uneventful Friday For Bonds
MBS Live Recap: Abnormally Uneventful Friday For Bonds
News & media website News & media website | 2 years ago
Abnormally Uneventful Friday For Bonds Whether we're talking about actual Fridays or Thursdays that fall before 3-day weekends, the last trading day of each of the past 4 weeks has not been great for the bond market.ย  One of them marked an abrupt reversal of our best shot at consolidation, and the other three took rates rapidly up to new long-term highs.ย  Today was great by comparison with Treasury yields falling modestly and MBS holding mostly steady ...
Abnormally Uneventful Friday For Bonds Whether we're talking about actual Fridays or Thursdays that fall before 3-day weekends, the last trading day of each of the past 4 weeks has not been great for the bond market.ย  One of them marked an abrupt reversal of our best shot at consolidation, and the other three took rates rapidly up to new long-term highs.ย  Today was great by comparison with Treasury yields falling modestly and MBS holding mostly steady ...
MBS Live Recap: Bonds Obliterated by CPI Reaction and Fed Fear
MBS Live Recap: Bonds Obliterated by CPI Reaction and Fed Fear
MBS Live Recap: Bonds Obliterated by CPI Reaction and Fed Fear
MBS Live Recap: Bonds Obliterated by CPI Reaction and Fed Fear
News & media website News & media website | 1 year ago
Bonds Obliterated by CPI Reaction and Fed Fear If the bond market is forced to digest a surprisingly hot inflation report that goes a long way toward undoing much of the recent optimism surrounding a reversal in post-covid price pressures, we would always hope such things don't happen 3 days before a big Fed announcement with an updated dot plot.ย  But alas!ย  The dots cometh next Wednesday afternoon, and it's clear that market participants are hedging their bets for some significant migration t...
Bonds Obliterated by CPI Reaction and Fed Fear If the bond market is forced to digest a surprisingly hot inflation report that goes a long way toward undoing much of the recent optimism surrounding a reversal in post-covid price pressures, we would always hope such things don't happen 3 days before a big Fed announcement with an updated dot plot.ย  But alas!ย  The dots cometh next Wednesday afternoon, and it's clear that market participants are hedging their bets for some significant migration t...
MBS Live Recap: Fed Day Preview: What Are They Doing and How Much Will Bonds Care?
MBS Live Recap: Fed Day Preview: What Are They Doing and How Much Will Bonds Care?
MBS Live Recap: Fed Day Preview: What Are They Doing and How Much Will Bonds Care?
MBS Live Recap: Fed Day Preview: What Are They Doing and How Much Will Bonds Care?
News & media website News & media website | 1 year ago
Fed Day Preview: What Are They Doing and How Much Will Bonds Care? Given all the bond market volatility seen recently, the outlook for tomorrow's Fed announcement is surprisingly well understood by market participants. Both Fed speakers and Fed Fund Futures agree on a 50bp hike as a virtual certainty.ย  We also know the Fed is highly likely to announce a start date for balance sheet normalization.ย  They were even kind enough to lay out a normalization g...
Fed Day Preview: What Are They Doing and How Much Will Bonds Care? Given all the bond market volatility seen recently, the outlook for tomorrow's Fed announcement is surprisingly well understood by market participants. Both Fed speakers and Fed Fund Futures agree on a 50bp hike as a virtual certainty.ย  We also know the Fed is highly likely to announce a start date for balance sheet normalization.ย  They were even kind enough to lay out a normalization g...
MBS Live Morning: Bonds Catch No Breaks Even After Lower Core Inflation
MBS Live Morning: Bonds Catch No Breaks Even After Lower Core Inflation
MBS Live Morning: Bonds Catch No Breaks Even After Lower Core Inflation
MBS Live Morning: Bonds Catch No Breaks Even After Lower Core Inflation
News & media website News & media website | 1 year ago
This morning's much-anticipated core PCE inflation headline came out at 5.2% year-over-year versus a median forecast and previous reading of 5.3%.ย  Great news! Right?ย  Turns out: not so much.ย  Markets were still hung up about a big beat in headline inflation (0.9 vs 0.5 previously) as well as a big beat in the Employment Cost Index (1.4 vs 1.1 f'cast).ย  Yields spiked to the highest levels of the week after a bit of initial indecision.ย  MBS started out down half a point.ย ย  Bonds managed ...
This morning's much-anticipated core PCE inflation headline came out at 5.2% year-over-year versus a median forecast and previous reading of 5.3%.ย  Great news! Right?ย  Turns out: not so much.ย  Markets were still hung up about a big beat in headline inflation (0.9 vs 0.5 previously) as well as a big beat in the Employment Cost Index (1.4 vs 1.1 f'cast).ย  Yields spiked to the highest levels of the week after a bit of initial indecision.ย  MBS started out down half a point.ย ย  Bonds managed ...
MBS Live Recap: Bonds Bounce Back Despite Hotter Inflation Data
MBS Live Recap: Bonds Bounce Back Despite Hotter Inflation Data
MBS Live Recap: Bonds Bounce Back Despite Hotter Inflation Data
MBS Live Recap: Bonds Bounce Back Despite Hotter Inflation Data
News & media website News & media website | 1 year ago
Bonds Bounce Back Despite Hotter Inflation Data Feel free to call it a comeback, but don't ask why it happened.  Today's bond rally is an answer in search of a question or a solution in search of a problem.  You get the idea.  There were only 2 kinds of market participants who expected a medium-big bond rally to follow a hotter CPI print: perma-bulls and lucky guessers.  Any factual, objective attempt would rely on things like&nb...
Bonds Bounce Back Despite Hotter Inflation Data Feel free to call it a comeback, but don't ask why it happened.  Today's bond rally is an answer in search of a question or a solution in search of a problem.  You get the idea.  There were only 2 kinds of market participants who expected a medium-big bond rally to follow a hotter CPI print: perma-bulls and lucky guessers.  Any factual, objective attempt would rely on things like&nb...
MBS Live Recap: Fed Speakers and Corporate Bonds Keep Negative Momentum Intact
MBS Live Recap: Fed Speakers and Corporate Bonds Keep Negative Momentum Intact
MBS Live Recap: Fed Speakers and Corporate Bonds Keep Negative Momentum Intact
MBS Live Recap: Fed Speakers and Corporate Bonds Keep Negative Momentum Intact
News & media website News & media website | 2 years ago
Fed Speakers and Corporate Bonds Keep Negative Momentum Intact Bonds came into the domestic session moderately weaker, following European markets (which, themselves, were incidentally following US markets from Thursday afternoon and yesterday).ย  A majority of the selling in the morning hours followed the 8:20am CME open, suggesting traders showed up to sell regardless of data or events.ย  Afternoon weakness was more readily attributable to corporate bon...
Fed Speakers and Corporate Bonds Keep Negative Momentum Intact Bonds came into the domestic session moderately weaker, following European markets (which, themselves, were incidentally following US markets from Thursday afternoon and yesterday).ย  A majority of the selling in the morning hours followed the 8:20am CME open, suggesting traders showed up to sell regardless of data or events.ย  Afternoon weakness was more readily attributable to corporate bon...
MBS Live Recap: Bonds Doing Admirable Job of Digesting Harsh New Reality
MBS Live Recap: Bonds Doing Admirable Job of Digesting Harsh New Reality
MBS Live Recap: Bonds Doing Admirable Job of Digesting Harsh New Reality
MBS Live Recap: Bonds Doing Admirable Job of Digesting Harsh New Reality
News & media website News & media website | 2 years ago
Bonds Doing Admirable Job of Digesting Harsh New Reality Yesterday's comments from Fed Vice Chair Brainard effectively prepped the bond market to receive some bad news today.ย  Trader's correctly guessed that Brainard's hawkish talk on balance sheet normalization spoke to the probability of sterner stuff in today's Fed Minutes release.ย  To wit, the Fed's thumbnail sketch for balance sheet shrinkage would involve slowing MBS purchases to all but a trickl...
Bonds Doing Admirable Job of Digesting Harsh New Reality Yesterday's comments from Fed Vice Chair Brainard effectively prepped the bond market to receive some bad news today.ย  Trader's correctly guessed that Brainard's hawkish talk on balance sheet normalization spoke to the probability of sterner stuff in today's Fed Minutes release.ย  To wit, the Fed's thumbnail sketch for balance sheet shrinkage would involve slowing MBS purchases to all but a trickl...
MBS Live Morning: Are Bonds Nervous to Hear What They Already Know?
MBS Live Morning: Are Bonds Nervous to Hear What They Already Know?
MBS Live Morning: Are Bonds Nervous to Hear What They Already Know?
MBS Live Morning: Are Bonds Nervous to Hear What They Already Know?
News & media website News & media website | 2 years ago
The centerpiece of today's event calendar is a panel discussion on the global economy hosted by the IMF.ย  Both Powell and ECB President Lagarde are on the short list of speakers.ย  With almost every recent Fed speaker mentioning the possibility--if not likelihood--of a 50bp hike in May (and several who bluntly said the 50bp hike could coincide with the announcement of balance sheet normalization), this is indeed a logical opportunity for Powell to effectively release the next FOMC statement 2 w...
The centerpiece of today's event calendar is a panel discussion on the global economy hosted by the IMF.ย  Both Powell and ECB President Lagarde are on the short list of speakers.ย  With almost every recent Fed speaker mentioning the possibility--if not likelihood--of a 50bp hike in May (and several who bluntly said the 50bp hike could coincide with the announcement of balance sheet normalization), this is indeed a logical opportunity for Powell to effectively release the next FOMC statement 2 w...
MBS Live Recap: Do Bonds Care About Jobs Data Again?
MBS Live Recap: Do Bonds Care About Jobs Data Again?
MBS Live Recap: Do Bonds Care About Jobs Data Again?
MBS Live Recap: Do Bonds Care About Jobs Data Again?
News & media website News & media website | 1 year ago
Do Bonds Care About Jobs Data Again? Yesterday it was the ISM Manufacturing data that moved the bond market.ย  Today, even though there wasn't much movement, the AM jobs data arguably prevented some weakness.ย  After months of focusing on nothing but inflation, bonds increasingly find themselves concerned with the economic implications of certain reports.ย  With that in mind, tomorrow's non-farm payrolls data is probably more important than it has been in many months.ย  Today's video discusses w...
Do Bonds Care About Jobs Data Again? Yesterday it was the ISM Manufacturing data that moved the bond market.ย  Today, even though there wasn't much movement, the AM jobs data arguably prevented some weakness.ย  After months of focusing on nothing but inflation, bonds increasingly find themselves concerned with the economic implications of certain reports.ย  With that in mind, tomorrow's non-farm payrolls data is probably more important than it has been in many months.ย  Today's video discusses w...