MBS Begin Week Fairly Flat, But Losing Steam From Morning Strength

Posted To: MBS Commentary

As expected, volume and volatility have been quite light today as the week’s more meaningful events are on hold until tomorrow. This morning’s scheduled Fed buying in the 30yr sector as well as this afternoon’s 3yr Treasury Auction haven’t had much of an impact on prices, with traders attributing more movement to flows and positioning for the rest of the week. Indeed, the trading range in MBS has been less than 6/32nds, but that has been almost exclusively down since just after 10am. Last Thursday was “the roll” for Fannie and Freddie 30yr fixed MBS. March coupons were retired and we move to viewing April coupons as the “front month,” aka the first MBS coupons in line to be delivered/settled. Just like lenders tend to pay less rebate for longer lock periods, MBS coupons that are farther out…(read more)

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