Bonds Sticking to Year-End Script

Bonds did a perfect job sticking to their year-end script today.  It reads: "ZZZzzz..."  MBS made some token gains during the AM hours, but not to such an extent that we should feel compelled to investigate.  Treasuries were rallying at the same time as an upgraded stimulus package seems to be a non-starter in the Senate.  The bond market's attention has already shifted to the far more significant Georgia senate run-off election day on January 5th.

Econ Data / Events

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

  • Chicago PMI 59.5 vs 57.0 f'cast, 58.2 prev

  • Pending Home Sales -2.6 vs 0.0 f'cast, -0.9 prev

Market Movement Recap
08:56 AM

Light volume and light liquidity led to Treasuries being pushed around just a bit in the overnight session--first weaker, then stronger.  Yields are roughly unchanged now at the start of the domestic session.  UMBS are mixed with 2.0 coupons up a tick (0.03) and 1.5 coupons down by the same amount.

10:08 AM

No discernible impact from data.  Small, friendly mystery move at 9:55am likely related to month/year-end trading. 10yr yields down less than 1bp at .935.  UMBS 1.5 coupons are up 1 tick (0.03) at 100-28 (100.875).

02:37 PM

After modest gains in the morning hours, MBS have given back a few ticks.  That leaves the day-over-day improvement at just under an eighth of a point.  10yr yields are down 1.4bps to .928.  None of the above is cause for excitement, concern, or a care in the world.