UMBS 5.0 retreats to 99.20, 10-year yield ticks up to 4.31% — morning bid fades but 30-year rate holds at 6.32%

The morning's modest gains are giving back a few ticks by midday. UMBS 5.0 has slipped from 99.23 to 99.20 — down 3 cents from the open but still up 4 cents on the day. The 10-year Treasury yield has edged from 4.291% to 4.306%, a 1.5 basis point reversal. The 30-year conventional rate hasn't moved — still 6.32%.

This is the pattern the morning described: short-duration moves on noise that don't sustain. The bond market opened firm, ran up 8 cents on UMBS, then shed half of that as the headlines that moved prices this morning faded without confirmation. The underlying range — 10-year between 4.29% and 4.32%, UMBS near par — remains intact. Until GDP advance and PCE data land later this week, the market has no hard catalyst to break out of the consolidation pattern in either direction.

— David Burson, NetRate Mortgage