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Bond rally lifts mortgage-backed securities before jobs report
Mortgage-backed securities rose 3 ticks, while the 10-year Treasury yield was down 7 bps at 5.218 after a sharp intraday reversal, Mortgage News Daily reported.
Mortgage News Daily said the bond market staged a rally ahead of an upcoming economic report, setting up what could be either confirmation or reversal depending on the jobs report outcome.
The outlet pointed to continued volatility into Friday, noting that an additional bout of 8:20am selling erased small overnight gains even as the day ultimately ended up positive, with mortgage-backed securities up 3 ticks.
Mortgage News Daily cited the 10-year Treasury yield at 5.303 earlier, up 1.6 bps, then later down 7 bps to 5.218, calling out a large intraday reversal.
The report also suggested European credit spreads and short-covering ahead of the jobs report, along with new-month trading activity, could have contributed, and it added that mortgage-backed securities were up 3/8ths.