MBS MID-DAY: Once More Into The Range!

At yesterday's close, bond markets were once again pushing the upper limits of the pre-Fed range.  As I discussed this morning, bond markets are circling the wagons ahead of next week's Fed announcement, meaning that they've been trading in a consolidating (narrower) range. 

While that range has been consolidating more on the higher side of the recent rate spectrum, it would have been somewhat surprising to see the trends actually break without some sort of justification.  Well, perhaps 'surprising' is the wrong word.  It would have been sort of a giveaway as to underlying market sentiment, and that giveaway would have been surprising considering the strong evidence for a stalemate between the September and December Fed rate hike camps.

For those who like their bond market movement "boring and green," today has thankfully delivered so far.  We COULD point to 0.8 percent drop in annual core producer prices, but others could just as easily point to the steady month-over-month reading AND the fact that it beat forecasts rather handily.  We could go on to point out Consumer Sentiment at the lowest level in nearly a year, and there wouldn't be much anyone could say to counter that, apart from the fact that Consumer Sentiment doesn't tend to be a big market mover.

All we can do is bide our time, hoping for no major drama until we have a chance to see how things are going after the Fed says whatever it's going to say next week.  That makes every day even MORE about the intraday movement than it already is.  In other words, we're living minute to minute in terms of market-watching between now and next Wednesday.