The early days of a new trading month and the positioning ahead of next week's Fed announcement have resulted in clear curve trading biases. In English, this means that shorter-term Treasuries are doing much better than longer-term Treasuries. For example, 2yr yields are down 2.4bps while 10yr yields are up 1.1bps. This dynamic is usually good for MBS because the average implied duration for MBS is closer to 5 years than 10 these days. The result: MBS and 5 year Treasuries are both slightly stronger on the day while 10s are still slightly weaker.
Mortgage Rates Now Solidly Back Above 6%
According to our chart of MND’s mortgage rate index, 30yr fixed rates bottomed at 6.01% yesterday, but that’s because the chart logs the day’s latest entry. On Friday, until late in the day, the chart showed a rate of 5.99%. It was only after sev…