Slow and Sideways as Markets Wait For Bigger News

Bonds began the day in moderately weaker territory but rallied back over the next few hours.  The buying demand was linear and methodical.  It avoided giving the impression that it was tied to any specific event or newswire. Based on movement in stocks and other markets, bond buyers weren't reacting to any changes in the Fed policy outlook for next week.  That is more likely to be a consideration on Thursday's session with the release of more meaningful economic data.  Ultimately, it's next Wednesday's Fed announcement (and press conference, and "dots") that will mark the next major inflection point.

Econ Data / Events
    • Producer Price Index (PPI)
      • -0.1 vs -0.1 f'cast, -0.4 prev
    • Core PPI
      • 0.4 vs 0.3 f'cast, 0.3 prev
Market Movement Recap
09:03 AM

Slightly weaker overnight, no reaction to PPI data, and modest recovery after that.  Still weaker on the day with 10yr yields up 2.9bps and 4.5 UMBS down 3 ticks (0.09). 

11:58 AM

Bonds turned green just after 11am and have picked up a bit more ground since then.  MBS up almost an eighth and 10yr yields down 1.1bps at 3.40. 

02:12 PM

Gains leveled off into the PM hours and MBS have been flat since then.  Similar story for 10yr yields.  Very very quiet.