Bonds Snap Back Into Holiday Mode
Wednesday’s abrupt sell-off increasingly looks like the market’s way of getting caught up after 2 days of holiday closures in London (when London is closed, cash Treasuries don’t trade overnight during the European session). Things were a bit touch and go this morning as yields rose back toward unchanged levels and MBS flirted with negative territory, but the PM hours have seen a return of calm, thinly traded movement. It’s a bonus that the movement happens to be in a friendly direction. 10yr yields hit the 3pm close down roughly 4bps. MBS were nearly an eighth of a point higher at the same time.
Econ Data / Events
Fed MBS Buying 10am, 11:30am, 1pm
Jobless Claims 198k vs 208k f’cast, 206k prev
Chicago PMI 63.1 vs 62.0 f’cast, 61.8 prev
Market Movement Recap
08:40 AM Modest strength in Asia partially offset by modest weakness after 5am. 10yr yields still down 2.2bps at 1.534. MBS up nearly an eighth.
10:34 AM choppy 2-way trading gave way to a bit of weakness heading into 10am hour. Treasuries and MBS both trying to bounce at their weakest levels of the day. 10yr still down roughly 2bps. MBS 1-3 ticks (0.03-0.09) weaker depending on when you look at the screen.
01:38 PM Bonds found footing heading into the PM hours and have been flat since then. 10yr down 3.5bps at 1.522. MBS up 2 ticks (0.06).