Limited Reaction to Headlines and Fed Minutes

After a quiet trading day yesterday, today proved to be even quieter.  That said, bonds were still willing to react to covid headlines and the Fed meeting minutes, albeit just barely enough to notice.

Econ Data / Events

  • 11:30-11:50 AM (ET) - Fed 30yr UMBS Buying  

  • ADP Employment 2.369m vs 3m f'cast, +3.065m prev (revised up from -2.76m)

  • ISM Manufacturing: 52.6 vs 49.5 f'cast, 43.1 prev

  • Construction Spending: -2.1 vs +1.0 f'cast, -3.5 prev

Market Movement Recap
08:36 AM

Bonds were weaker right out of the gate in the Asian trading session, but only moderately.  They've been essentially flat since then with 10yr yields up 2-3bps on the day, currently trading at .686%.  MBS are outperforming again, with prices currently up 1 tick (0.03).  No impact from the ADP data.

10:04 AM

No major reaction to the ISM data, despite returning to expansionary territory at 52.6.  10yr yields holding early weakness, up 3bps at .69 and UMBS 2.0s at the same levels as the last update.

12:42 PM

Treasuries recovered a bit from the weakest levels of the day and MBS rallied to a lesser degree.  This correlated initially with stock market weakness, but the move is over for now and yields have edged slightly higher in the past 30 minutes (but still not back to the morning's highs.

03:09 PM

Bonds made it to the 3pm CME close without any additional drama.  10yr yields are still 2.6bps higher on the day.  MBS are unchanged.  Possibly a bit of weakness following Fed Minutes, but correlation may not be causality.