MBS Live Morning: Infrastructure Bill A Non-Issue; Bonds More Interested in Supply – Mortgage News Daily

As far as most news outlets are concerned, Friday’s passage of the infrastructure bill is the big news for Monday morning.  At one time, the bond market may have cared quite a lot about such things, but clearly, that time has passed–at least as far as it concerns this example.  New spending in the future would still likely have an impact due to supply implications.  For now, supply concerns are limited to the slate of Treasury auctions and corporate bonds looking for buyers on this week’s holiday-shortened schedule.

In terms of trading levels, 10yr yields were jut a few bps weaker overnight and early domestic trading has seen slightly better buying.  The net effect is a substantial preservation of last week’s gains with yields well under 1.50%.

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The resilience is all the more impressive in light of the condensed 3/10/30yr auction cycle beginning today.  It wouldn’t be a surprise to see bonds struggle with supply to a slightly greater extent than normal on a holiday-shortened week.  And while the official Veterans Day market closure is on Thursday, we expect Friday will have levels of participation that are only slightly better than a post-Thanksgiving Friday.  In other words, the week is basically over by Wednesday afternoon.

MBS Pricing Snapshot

Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.


UMBS 2.5

103-09 : -0-02


10 YR

1.4640 : +0.0110

Pricing as of 11/8/21 9:18AMEST

Tomorrow’s Economic Calendar

Time Event Period Forecast Prior
Monday, Nov 08
13:00 3-Yr Note Auction (bl) 56
Tuesday, Nov 09
8:30 Core Producer Prices YY (%)* Oct 6.8 6.8
13:00 10-yr Note Auction (bl)* 39
Wednesday, Nov 10
7:00 MBA Purchase Index w/e 271.1
7:00 MBA Refi Index w/e 2645.0
8:30 Core CPI (Annual) (%)* Oct 4.3 4.0
8:30 Jobless Claims (k) w/e 265 269
10:00 Wholesale inventories mm (%) Sep 1.1 1.1
13:00 30-Yr Bond Auction (bl) 25
Thursday, Nov 11
0:00 Veteran’s Day *
Friday, Nov 12
10:00 Consumer Sentiment Nov 72.5 71.7
10:00 1yr Inflation Outlook (%) Nov 4.8
10:00 5yr Inflation Outlook (%) Nov 2.9