MBS MID-DAY: Holding Ground Uneventfully Despite Weakness in Stocks

I'll be the first to tell you that bond yields don't always follow stocks.  Indeed, explicating their complicated relationship was the whole point of yesterday morning's commentary.  With yesterday being a big day for earnings and a more liquid day for markets, bonds were more keen to follow stocks lower.  But that relationship has changed today, as 10yr yields haven't been keen on breaking much below 2.26, even as S&P futures are off 20 points from morning highs.

New Home Sales data was out much weaker than expected, and it had little effect on either side of the market.  Arguably of more interest to the equities complex was a WSJ story that presidential frontrunner Hillary Clinton would propose 'nearly doubling capital gains tax rates on short-term investments.'

In other news that seemed like it was news, the Fed put out a press release stating that it had inadvertently published internal staff forecasts 5 years early.  This is material used as background during the Fed meetings, and it's normally released after the 5 year embargo that applies to the transcripts from those meetings.  Instead, it was accidentally included in data at the end of June.  It should tell you all you need to know that it's July 24th now and this is the first we're hearing of this data.  This was a housekeeping issue for the Fed, nothing more.  Even if someone wants to argue that it matters, charts are flat.  So markets obviously didn't care.