Mystery Rally Gets Bonds Back in The Green

Both Tuesday and Wednesday are effectively free from market-moving economic data,  Moreover, nothing this week has to offer can come close to next week's CPI/Fed combo.  That leaves bonds to drift without much conviction until next Tuesday and today fit the bill.  The most notable run of the day happened at 2pm when Treasury yields dropped fairly sharply.  The caveat is that the drop took place well within yesterday's trading range, and yesterday's range was well within Friday's trading range.  As such, we hesitate to read much into the afternoon rally, but remain bemused by the absence of obvious motivation.  More on this bemusement in today's video...

Econ Data / Events
    • ISM Non Manufacturing
      • 56.5 vs 53.3 f'cast, 54.4 prev
    • ISM Prices Paid 
      • 70.0 vs 70.74 prev
Market Movement Recap
08:43 AM

Treasuries initially weaker amid risk-on trade in Asia. Rallied back with Europe.  10yr down 3.7bps at 3.546.  MBS are anywhere from unchanged to an eighth of a point stronger depending on liquidity. 

01:41 PM

10yr sideways and narrower, currently down 2.2bps on the day at 3.561.  MBS down roughly an eighth and also generally sideways.

02:42 PM

MBS moving into positive territory now, currently up an eighth of a point.  10yr down 6.8bps at 3.513.  Heavy selling in stocks contributing.  

04:09 PM

Mostly holding the afternoon's mystery gains.  MBS up an eighth on the day.  10yr down 5.5 bps at 3.528.