Stronger Start Gives Way to Weaker Finish

Bonds improved in overnight trading with most of the gains seen during European trading hours.  The friendly trend reversed almost immediately after the US trading session.  There were not obvious catalysts for the shift in terms of news or data.  Rather, traders were likely reacting to a rapidly growing slate of corporate bond issuance on an already busy week of bond market supply.  The net effect wasn't too traumatic, with 10yr yields only a few bps higher by 3pm and MBS down an eighth of a point, but the trip from the highs to the lows was bumpy enough for more than a few negative reprices.

Econ Data / Events
    • Factory Orders
      • -1.6 vs -1.8 f'cast, 1.7 prev
Market Movement Recap
09:30 AM

Modestly stronger in Asia with better gains in Europe amid volatile trading.  Losing some overnight gains now, but 10yr still down 3.2bps at 3.926.  MBS up 2 ticks.

12:11 PM

MBS down to unchanged, 10yr up 1.1 bps at 3.97.  EU and corporate issuance leading the weakness.

02:07 PM

Steady selling continues with bonds at weakest levels. 10yr up 2.3bps at 3.981.  MBS down an eighth on the day and almost 3/8ths from the highs.