Mortgage Backed Securities (MBSs) continued their volatile trading today. MBS prices are higher (rates lower) this morning as traders focus more on the acceleration of job losses than on the flood of new supply of bonds that is overwhelming demand.
In the last 5 days, the Fed purchased a little more than $22 billion in MBSs. That brings the total purchased to date to $91billion, and averages out to $4.5 billion per day.
MBS traders will focus on the employment numbers on Friday. They are looking for evidence the recession is deepening while at the same time digest the expected record amount of debt needed to finance the myriad of anticipated government spending. On Wednesday, we get the Challenger & ADP job reports. This will provide a glimpse at the employment and layoff situation. The jobless claims report comes out on Thursday, while the Employment report for January comes out on Friday.
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Lew Corcoran |
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