Volatility is Possible, But It Wasn't Possible Today

Bonds have decidedly engaged in a stereotypical year-end grind.  It's just like any other sideways grind, but the year-end versions tend to last longer and remain confined in narrower ranges.  Breakouts are possible, of course, but breakouts that happen at this time of year are just as likely to be reversed  in short order.  Today's video discusses why the "golden age of lock/float risk" is almost over.

Econ Data / Events

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

  • Q3 GDP 33.4 vs 33.1 

  • Philly Fed Biz Activity -26.8  v -15.9

  • Consumer Confidence 88.6 vs 97.0 f'cast

  • Existing Home Sales 6.69m vs 6.70m f'cast

Market Movement Recap
08:35 AM

Calm, sideways trading overnight.  Brexit concession from the EU hurt EU yields at 2:50am ET (fishing water rights).  US yields followed somewhat, but remained in positive territory.  10yr is less than 1bp lower on the day at .93 and 1.5 UMBS are up 2 ticks (0.06).

02:17 PM

VERY slow/sideways.  Nothing significant to report.  Scattered  Brexit headlines, but no impact.  No reaction to AM data.  S&P futures unchanged.  10yr yield down 1.7bps at .921%.  MBS up 2 ticks (.06)--all in similar shape compared to several hours ago.