Boring Day For Bonds, But Tension Remains For Mortgages

Rates continued reeling (depending on the lender) from the G-fee hike announced late Wednesday, but bonds managed to hold their ground (finally).  This is the first decent push back against the recent technical breakout and the first real chance we have of defining an upper boundary for the current range.  It's also the most optimistic view of such a ceiling.  We'll know more about its chances next week.

Econ Data / Events

  • 20min of Fed 30yr UMBS Buying 10am, 1130am (M-F) and 1pm (T-Th)

  • Retail Sales 1.2 vs 1.9 f'cast vs 8.4 prev

  • Core Retail Sales 1.4 vs 0.8 f'cast, 5.6 prev

  • Industrial Production 3.0 vs 3.0 f'cast, 5.7 prev

  • Consumer Sentiment 72.8 vs 72.0 f'cast, 72.5 prev

Market Movement Recap
08:15 AM

Bonds were slightly stronger in Asia before pushing back in the other direction during European hours.  10yr yields are still 1bp lower vs yesterday.  MBS are 1 tick (0.03) better to start the day, but it remains to be seen how much MBS movement matters to rate sheets given the current chaos.

11:48 AM

Very calm day so far.  No reactions to any of the data.  No significant movement in either side of the market.  10yr down 2bps bouncing along lows of the day at .696.  2.0 UMBS still roughly unchanged.