Jackson Hole Follow-Through or Something Else?
Last Friday’s Jackson Hole speech was the subject of a fair amount of speculation and and anticipation in advance. Some thought it would be a total non-event. Others thought it could offer important clues about September. The truth was somewhere in between with Powell not offering any surprising new ideas, but with markets nonetheless finding a way to be surprised about it. Perhaps it was the complete lack of a conciliatory message? Either way, follow through from Friday’s Jackson Hole reaction accounts for at least some of today’s weakness. Beyond that, data will need to provide a motivation for yields to fall in a meaningful way.
Econ Data / Events
no major economic reports
Market Movement Recap
09:10 AM Sharply weaker overnight with 10s testing the recent ceiling at 3.13%. Some traction since then (still up 6bps at 3.09%). MBS down more than 3/8ths of a point. No overt, discrete motivations. Just a general dogpile on Friday’s trading with bonds finally feeling the effects that Friday’s stock sell-off helped them avoid.
01:18 PM Ceilings held up fairly well despite some early weakness. MBS are outperforming now along with the short end of the yield curve. 4.5 coupons are down just under a quarter point after being down more than 3/8ths of a point earlier.
03:42 PM little-changed in MBS or Treasuries since the last update. MBS still outperforming, down just over a quarter point on the day. 10yr yields up 8.8bps at 3.117.