Wild Month Ends Uneventfully For Bonds

The first 3 and a half weeks of January were not great for the bond market and fans of low rates.  That said, most of the drama was concentrated in the first week (which ended up being the biggest week of selling since November 2016 (not counting the unique drama of March 2020).  Yields prodded higher ceilings in the past 2 weeks, but with less fanfare and no follow-through.  The final trading day of the month ended up being one the quietest, both in terms of volume and volatility.  Bonds are keeping their options open for the next move.

Econ Data / Events

  • Fed MBS Buying 10am, 11:30am, 1pm

  • Chicago PMI 65.2 vs 61.7 f'cast, 64.3 prev

Market Movement Recap
08:44 AM

Mostly sideways for most of the overnight session, then moderately weaker in Europe.  Early domestic traders adding to selling pressure.  10yr up 2.7 bps at 1.805 and 3.0 UMBS down 5 ticks (.16).

12:55 PM

AM resilience remained intact during AM hours.  Slight rally into PM, but not enough to push bonds into positive territory.  10yr still up 1.5bps at 1.793 and MBS down only 1 tick at 102-06 (102.19).

02:55 PM

Hitting positive territory (or breaking even, at least) right at the 3pm CME close.  10yr is unchanged at 1.778 and 3.0 UMBS are up 1 tick (0.03).