Strong Showing For Bonds. So Have Things Changed?
Bonds rallied overnight of their own volition and in concert with overseas markets. Gains were steady and not insignificant. Unlike many recent examples, US traders didn’t push back against the movement seen during overnight hours. If anything, US traders added to the move. This was mostly true for the longer end of the yield curve (i.e. 10yr yields fell way more than 2yr yields)–a fact that suggests some of today’s rally is due to a correction in the sharp move in the opposite direction for the yield that began last Monday. Motivations and particulars aside, what does this resilience tell us about the heretofore relentless uptrend in rates?
Econ Data / Events
FHFA Home Prices
-0.7 m/m vs -0.6 prev
+11.9 y/y vs 13.9 prev
Case Shiller Home Prices
-1.3 m/m vs -0.7 prev
+13.1 y/y vs +16.0 prev
Market Movement Recap
08:40 AM Stronger overnight in both Asia and Europe. Domestic traders not pushing back on gains so far. 10yr down 8.4bps at 4.161 and MBS up 3/8ths of a point.
10:36 AM Additional gains into and after the 9:30am NYSE open. 10yr down 16bps at 4.088. MBS up more than 5/8ths of a point.
01:03 PM Short end of the curve slightly weaker after 2yr auction, but 10s holding most of the day’s gains, down 15.3bps at 4.094%. MBS up 3/4ths of a point.
04:26 PM MBS heading out near best levels, up more than 3/4ths of a point. 10yr yields down 17bps at 4.077. Stocks up 1%.