Still Waiting For a Breakout After Friday's Uneventful Strength

Friday began with solid gains courtesy of weak PMI data in Europe overnight and some follow-through buying in early US trading.  Sellers surfaced at the 9:30am NYSE open and their numbers grew after US PMI data failed to live up to EU's negative hype.  The net effect was the transformation of a strong rally into an uneventful rally by mid day.  Treasuries gave up just over half of the overnight gains and stayed flat into the 3pm CME close.  MBS were slightly more volatile, but only superficially (due to illiquidity).  The modest gains leave bonds in the prevailing range and they leave us waiting for a confirmed breakout from that range.

Econ Data / Events
    • S&P Manufacturing PMI
      • 46.3 vs 48.5 f'cast, 48.4 prev
    • S&P Service PMI
      • 54.1 vs 54.0 f'cast, 54.9 prev
Market Movement Recap
10:03 AM

Limited push back against overnight rally.  10yr still down 8bps at 3.717.  MBS up .125 to .25 depending on liquidity.

01:42 PM

Holding ground now after mid-day weakness. 10yr down 5.5bps at 3.742.  MBS up about a quarter point.

03:18 PM

Flat through the 3pm CME close with MBS still up roughly a quarter point and 10s down 5.3bps at 3.744.