Let's Talk About Whether It's Time To Talk About Some Resilience

Updated: Sep 23



By: Matthew Graham

Fri, Sep 23 2022, 4:44 PM

A large, rapid rate spike is frequently one of the best early indicators for at least some small token of a corrective rally. Even in the early 2022 rate spike, there were several opportunities for passengers to disembark on the way up--5 to 7 days here and there where rates were sideways to slightly lower. In the current case, rates haven't strung together more than 3 days of improvement since July. With the past two days adding an unexpectedly traumatic level of insult to injury, is it finally time to entertain a bounce--even if it's not a sustained, epic bounce?

Econ Data / Events

  • Jobless Claims 213k vs 218k forecast, 208k previous

  • Continued Claims 1.379m vs 1.400m forecast, 1.401m previous

Market Movement Recap 10:25 AM Bonds sold off sharply in the overnight session with 10s hitting 3.829 at the highs before crawling back to unchanged levels by the 9am hour. Treasuries have mostly leveled off since then, but only in the long end (10yr/30yr). MBS are underperforming along with the shorter end of the yield curve with 5.0 coupons down a quarter point. 02:09 PM Losses into the noon hour and a bounce back after that. Long end of the yield curve is outperforming. 5.0 MBS are roughly unchanged. 10yr yields are down 2.7bps at 3.683. 04:10 PM Prices topped out roughly in line with the last update and have lost some ground since then. MBS are down just over an eighth of a point, but 10yr yields are still near their best levels of the day, down 2.3bps at 3.687.

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