Fun While it Lasted: Bonds Give Up Data-Inspired Gains
Bonds started out weaker early this morning but were able to make gains after weaker economic data at 9:45am and 10:00am. Prices were almost a quarter of a point higher at their best levels but moved back into negative territory after a weak 2-year Treasury auction (not typically a market mover, but it was today).
Econ Data / Events
Markit Services PMI 44.1 vs 49.2 f’cast, 47.3 prev
Markit Manufacturing PMI 51.3 vs 52.0 f’cast, 52.2 prev
Composite PMI 45.0 vs 47.7 prev
Market Movement Recap
09:06 AM Initially flat to stronger, but sellers pounced on the 8:20am CME open. 10yr up 5.2 bps to 3.074. MBS down more than a quarter point.
09:55 AM Moderate improvement after weaker PMI data. 10yr up only 1.7bps at 3.039. MBS down only 2 ticks on the day (-0.06).
01:35 PM Nice gains into the noon hour, but selling off since then–especially after the 2yr Treasury auction. MBS down 2 ticks (0.06) at 98-10 (98.31) and 10yr yields up 2bps at 3.044.