MBS RECAP: Boring, Slow Morning Turns into Boring, Slow Afternoon

Thanks for reading, this has been my attempt to write a headline that made absolutely no one want to click and read the story.  But facts are facts, and today was just plain boring for bond markets.  10yr yields spent almost the entire day trading between 2.37 and 2.39.  To hold a 2bp trading range amid the recent volatility is truly something special.  It's special in the same way as the discovery, and subsequent ingestion of Benadryl, Ambien, or whatever else makes you sleepy.  But I digress...

There was no substantive news today, although there were untold scores of meaningless headlines concerning the Greek debt deal.  None of these matter, nor do they need to be considered.  None of these can be assumed to represent the truth either.  While it's entirely possible that many of them could be true, there's too much of a track record of Greek debt negotiations being a liar's game to believe any words before actions.  And trading reflects that, as the abundance of words and absence of actions left markets very little changed.

US bond markets outperformed Europe, although 10yr yields were careful not to break Friday's post-NFP lows of 2.366 (also last Wednesday closing levels and early May's outright intraday high).  The conclusion is that this could be shaping up as a technical inflection point.  It would be reassuring if we could get below it sooner than later, to whatever extent technical levels can even provide reassurance in this environment.