Bond Watchers Clearly Can't Choose The Wine in Front of ______

There are quite a few potential justifications for the activity we saw in the bond market today, and for every one of them, there's a fairly compelling "yeah but."  If this sounds like equivocation, or like we're "stalling" (what in the world can that be?), yep... that's about right.  It's also a symptom of a fairly unchanged bond market that's gearing up to make bigger moves based on bigger info.  So, if we had to pick one theme, it would be that of broad range-finding ahead of next week's Fed announcement (or more clarity on a fiscal package before then).  

Econ Data / Events
Market Movement Recap
08:53 AM

Super flat trading overnight with just a bit of back-and-forth heading into the start of the European session.  Stocks were generally weaker and bonds were unchanged at the domestic open.  Buyers started pecking away at 8:05am and got more aggressive after 8:35am.  The econ data wasn't necessarily the motivation.  Either way, 10s are 2+ bps lower, trading under .91% and MBS are up modestly.

11:40 AM

The early-session Treasury rally bounced hard at 10am.  No obvious correlation with related markets, news, or events.  Leaves us to conclude the bounce is either technical or the product of pre-auction defensiveness as the Treasury auction cycle begins today.  MBS are fairly disconnected, and have actually bounced in a friendly direction over the past 40 minutes or so.  1.5 coupons are down 2 ticks (.06) at 100-25 (100.78).

02:15 PM

Nice bounce back for MBS even though Treasuries remain in slightly weaker territory versus the lows of the day at 10am ET.  Fairly tame day overall in terms of trading ranges.  1.5 UMBS are up 2 ticks (0.06) now, near their best levels of the day.  Still no correlation with news, events, or related markets.  Stocks are near their highs, up 0.3% from 5pm yesterday.