Sideways to Slightly Weaker After Early Gains

It ended up being an uneventful day for bonds despite a handful of negative reprices in the mortgage world.  Yields were unchanged for most of the overnight session before surging quickly lower around 730am ET. The gains continued until 9am when 10yr yields challenged the 3.62% technical level.  The rest of the morning was spent on the back foot with all of the gains erased by 12:30pm ET.  The 20yr bond auction helped restore some composure--mostly for Treasuries as MBS never dipped into negative territory on the day.  Both MBS and Treasuries hit the 3pm close with modest gains intact.

Econ Data / Events
    • Existing Home Sales
      • 4.09m vs 4.20m f'cast, 4.43m prev
    • Consumer Confidence 
      • 108.3 vs 101 f'cast, 101.4 prev
Market Movement Recap
08:59 AM

10s are now down almost 6bps at 3.636 and MBS are up more than a quarter point after a decent directional rally that began around 7:30am ET.

11:35 AM

Weaker since 9am with MBS being more illiquid after the 10am econ data.  Still up an eighth, but down a quarter point from the highs.  10yr still down 1.1bps at 3.68, but up from lows of 3.62.

01:08 PM

Modest recovery after stronger 20yr bond auction, but not a game changer.  10yr down 1.9bps at 3.673 and MBS up 5 ticks (.16).  The initial post-auction rally is already meeting resistance. 

04:25 PM

MBS heading out near the weakest levels.  Treasury recovery didn't hold, but 10s aren't back to their highs of the day--down 2bps at 3.673.