MBS Live Day Ahead: High Bar For Bonds to do Something Meaningful

When a single, clearly-delineated event was responsible for 30bps of movement in 10yr yields in the matter of a few days, it's hard to get too worked up about 10bps of movement over the same time frame.  It's even harder when that 10bps has occurred well-inside that 30 bps AND when any individual day has been limited to about 6bps. 

The above is in reference to the 3.10% to 2.80% drop (and subsequent rebound) in yields surrounding the Italian drama of a few weeks ago.  Since then, bonds have been pretty indecisive and paralyzed.

Without any significant data or events on the calendar, and with this being a Friday during a time of year when traders are more wont to eye the exits early, there is a high bar in place for any of today's market movement to be classified as "meaningful."  We'd expect a bit of ongoing volatility surrounding corporate bond issuance, which has been elevated.  Apart from that, there's always some small chance that a big enough trade will come along to cause a snowball on these days with volume and liquidity that's low enough as to be vulnerable to such things.