MBS Live Recap: Holding Gains and Waiting For ECB

Treasuries and MBS held steady today, consolidating yesterday's gains and playing it safe ahead of tomorrow's ECB Announcement.

There really isn't much buzz about what the ECB (European Central Bank) might or might not say tomorrow.  The fact is quite simply that global central bank announcements are just about the only game in town when it comes to big-picture market movements.  

So any central bank announcement from one of the big 3 (US, Europe, Japan, and sometimes Great Britain) is a focal point for markets.  It's not so much about what they're expected to say as much as it is about the fact that anything they say can and will be used against financial markets in a court of volatility.

With all that in mind, it's not too surprising to see a flatter day in bond markets today.  In this case, flat is good, because it follows one of the strongest one-day moves of the past 2 months thanks to yesterday's ISM Non-Manufacturing data (note: this moved markets because it changed expectations for a Fed rate hike, and NOT because it provides some profound comment on the current state of the economy).

Long story short, bond markets are starting to show some signs of life after having been uncannily flat in terms of momentum and trading ranges.  To be sure, the trading ranges aren't under threat, but at the very least, momentum is starting to pick up.