Bond Market Uninspired After First Round of Econ Data

Today being the last trading day of the week, and a shortened one at that (SIFMA rec. 2pm), extremely low volume is no surprise. Borrowing from yesterday's close: "This means a few things.  Of course when volume is low, it takes fewer trades to move prices, which can contribute to volatility.  Additionally, when a significant amount of market participants are not participating, we're left to wonder whether or not the changes we do see are representative of where they will be when volume picks back up either in the week after Christmas or more probably in the new year.  Bottom line is that the actual changes in MBS levels in the short term are taken with that grain of salt.  We'll let you know if something about that assessment changes."

The trading action is rather dull and a quick glance back at the last week and change seems to strongly suggest that the 10yr note is grinding into 3.37 incessantly.

In contrast, MBS 4.5's have been able to put in a few "higher lows" this week, but are also honing in on their own seemingly preferred level around 102-00.  The low volume and low excitement make the MBS verdict exceedingly simple: things stray too far from 102-00 and there's reprice potential.  Shocker....

Attempting to rouse the markets to action so far today and failing:

North Korea is at it again, but markets don't seem to care: Markets Shrug Off North Korea "holy war" Threat.

In addition, while we did get personal spending, durable goods, and jobless claims on the data front, no one seemed to care much (Feel the burn of the apathy folks?)

Personal Spending

RTRS -  PERSONAL SPENDING +0.4 PCT (CONSENSUS +0.5 PCT) VS OCT +0.7 PCT (PREV +0.4 PCT)
RTRS -  PERSONAL INCOME +0.3 PCT (CONS +0.2 PCT) VS OCT +0.4 PCT (PREV +0.5 PCT)
RTRS -  CORE PCE PRICE INDEX +0.1 PCT (+0.0825; CONS +0.1 PCT) VS OCT 0.0 (PREV 0.0)
RTRS -  OVERALL PCE PRICE INDEX +0.1 PCT (+0.0889) VS OCT +0.2 PCT (PREV +0.2 PCT)
RTRS -  YEAR-OVER-YEAR PCE PRICE INDEX +1.0 PCT (OCT +1.2 PCT), CORE +0.8 PCT (OCT +0.8 PCT)
RTRS -  REAL CONSUMER SPENDING +0.3 PCT VS OCT +0.5 PCT (PREV +0.3 PCT)
RTRS -  PERSONAL SAVING RATE 5.3 PCT, LOWEST SINCE MARCH, VS OCT 5.4 PCT
RTRS -  MKT-BASED PCE PRICE INDEX +0.1 PCT (OCT +0.1 PCT), CORE +0.1 PCT (OCT -0.1 PCT)
RTRS -  MKT-BASED YEAR-OVER-YEAR PCE PRICE INDEX +1.0 PCT, CORE +0.8 PCT
RTRS -  YEAR-OVER-YEAR PCE PRICE INDEX INCREASE SMALLEST SINCE OCT 2009 (+0.3 PCT)

Durable Goods

RTRS -  DURABLES ORDERS -1.3 PCT (CONS. -0.5 PCT) VS OCT -3.1 PCT (PREV -3.4 PCT)
RTRS -  DURABLES EX-TRANSPORTATION +2.4 PCT (CONS +1.6 PCT) VS OCT -1.9 PCT (PREV -2.7 PCT)
RTRS -  DURABLES EX-DEFENSE -2.3 PCT (CONS +0.5 PCT) VS OCT -1.5 PCT (PREV -1.9 PCT)
RTRS -  NONDEFENSE CAP ORDERS EX-AIRCRAFT +2.6 PCT (CONS +2.5 PCT) VS OCT -3.6 PCT (PREV -4.3 PCT)
RTRS -  GEN. MACHINERY +0.5 PCT, ELECTRICAL EQUIPMENT +5.6 PCT, DEFENSE AIRCRAFT/PARTS +7.9 PCT
RTRS -  DURABLES EX-TRANSPORTATION RISE LARGEST SINCE MARCH (+4.9 PCT), EX-DEFENSE DROP LARGEST SINCE AUG 2009 (-2.5 PCT)

Jobless Claims

RTRS -  JOBLESS CLAIMS FALL TO 420,000 DEC 18 WEEK (CONSENSUS 420,000) FROM 423,000 PRIOR WEEK (PREVIOUS 420,000)
RTRS -  JOBLESS CLAIMS 4-WK AVG RISES TO 426,000 DEC 18 WEEK FROM 423,500 PRIOR WEEK (PREVIOUS 422,750)
RTRS -  CONTINUED CLAIMS FALLS TO 4.064 MLN (CON. 4.110 MLN) DEC 11 WEEK FROM 4.167 MLN PRIOR WEEK (PREV 4.135 MLN)
RTRS -  INSURED UNEMPLOYMENT RATE FALLS TO 3.2 PCT DEC 11 WEEK FROM 3.3 PCT PRIOR WEEK

That's it from party central for now, Consumer Sentiment and New Home Sales on deck shortly!