MBS Live Recap: Bonds Hold Steady Despite Big Ticket Events

Welcome to summertime in the bond market, where each day is narrower than the last!  The same can be said for the past 2 weeks and the past several months, for that matter.  By a wide margin, the 3-day trading range surrounding the apex of the Italian political drama easily contains every minute of trading since then.

To put that in perspective, that 3-day range was 2.78-3.01% in 10yr yields.  Today's range was 2.84-2.87%.  The only interesting thing that can be said for bonds during that time is that they've generally moved lower in yield and generally been willing to remain near those lows.

Today didn't do anything to change the summertime tone.  We even had the week's most anticipated economic data (at least for the bond market) in the form of CPI.  Unfortunately for those hoping for excitement, CPI was fairly close to consensus.  There were some offsetting factors, such as an uptick in the core annual reading and a downtick in the monthly headline reading. 

The 30yr bond auction didn't do any better.  It was slightly on the weak side, but not so much as to prompt any major selling in bonds.  MBS and Treasuries drifted toward the close in just barely weaker territory, ready to do this all again tomorrow, barring the appearance of something new and worthy of volatility.