Ukraine Headlines Are Noise in The Bigger (Badder) Picture

MBS Live Recap: Ukraine Headlines Are Noise in The Bigger (Badder) Picture


Tue, Feb 15 2022, 5:08 PM

The overnight trading session was marked by several headlines that served to de-escalate Russia/Ukraine tensions in the eyes of investors.  Whether this is justified, or whether tensions had really escalated much in the first place doesn’t matter.  Geopolitical risks have been a side show next to the ongoing repricing of Fed policy expectations.

  • Fed MBS Buying 10am, 11:30am, 1pm

  • Core Annual PPI……….. 8.3 vs 7.9 f’cast, 8.5 prev
    Core Monthly PPI……… 0.8 vs 0.5 f’cast, 0.6 prev
    NY Fed Manufacturing… 3.1 vs 12.15 f’cast, -0.7 prev

08:47 AM

Relatively sharp weakness overnight on headlines that de-escalated geopolitical tension.  Little-changed after AM data.  10yr up more than 5bps (2.04) and MBS down 6 ticks (.19).

11:37 AM

Decent bounce for MBS, but for no particular reason.  Bonds generally holding ground.  MBS appreciate some stability and have underperformed so much that were possibly seeing some value buying.  3.0 coupons only 2 ticks (0.06) lower on the day.  10yr still up 4.2bps at 2.028.

03:34 PM

Flat and calm afternoon, albeit at weaker levels.  MBS still down an eighth and 10yr up 6.3bps at 2.049%.  No new news or significant reactions to events. 

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