MBS Live Recap: Bonds Uneventfully Hold Narrow Range

Today was about as tame as they come  for bond markets, post-election.  10yr yields traded a high of 2.394 and a low of 2.361.  That's a very narrow day by recent standards, and if we look only at domestic hours, the range is a bit narrower still.  It's also remarkably narrow considering this week's "supply-heavy" backdrop.

Supply, in this case, refers not only to the slate of Treasury auctions, but also to the ongoing glut of corporate bond issuance for the new year.  While corporate bond yields don't necessarily dictate mortgage rate movement, they can impart volatility on Treasuries (which can be used in the corporate bond hedging process).  Beyond that, they simply add to the overall supply of bonds competing for investors' affections.  

Today's 3yr auction went off without a hitch.  While that's a good thing, it didn't have an effect on trading levels.  10yr yields and MBS continue holding WELL inside the 2017 range, with most of today's activity taking place inside YESTERDAY'S already narrow range.