Consolidation Takes Friendly Turn Ahead of CPI

Our focus this week has been on the notion of consolidation after last week's strong gains and ahead of this week's CPI (the all-important Consumer Price Index due out at 8:30am ET on Thursday, Jan 11). As we discussed yesterday, consolidation patterns can have ups and downs. Wednesday provided a perfect example of the consolidation moving back in a friendly direction without coming close to breaking the holding pattern marking the boundaries of the range (roughly 3.5 and 3.63 in terms of 10yr yields).

Econ Data / Events

- no significant econ data

Market Movement Recap

10:25 AM

Modestly stronger overnight and trading in a narrow range so far. MBS up a quarter point and 10yr yield down 3.7bps at 3.576

01:03 PM

Solid 10yr auction result after noticeably flat morning. Still sideways overall. 10yr down 4.4bps at 3.569. MBS up 6 ticks (.19).

02:39 PM

Additional gains around 2pm as comments from Fed's Collins made the rounds (favors 25bp hike). 10yr down 5.6 on the day to 3.559. MBS up 10 ticks (.31).