Calm Week Ends on an Even Calmer Note

It's rare to see non-holidays Fridays in January be quite as underwhelming as today turned out to be.  Bonds remained locked perfectly inside prevailing trends.  That's a good thing in this case as it meant moderate gains for both MBS and Treasuries.  Volatility risks increase next week with a bigger slate of economic data, but we'll wait to get too excited about that until it actually proves capable of moving the needle.  Today's video discusses what might be required for 10yr yields to break below 1.0%.

Econ Data / Events

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

  • Existing Home Sales 6.76m vs 6.55m f'cast, 6.71m prev

  • Markit Composite PMI 58.0 vs 55.3 prev

Market Movement Recap
08:35 AM

Markets trading 'risk-off' heading into the weekend.  Modest correction in European bonds spilling over into Treasuries to the tune of a 2.5bp rally in 10yr yields.  MBS are up almost an eighth to start.

12:37 PM

Slow, quiet day so far.  Modest weakness early, but almost fully erased now.  MBS and Treasuries both back near day's best levels.  Stocks are very gently lower.

04:15 PM

Might as well have been a holiday today.  Zero volatility.  Bonds remained perfectly inside prevailing trends.  That meant moderate strength in MBS with both 1.5 and 2.0 coupons gaining just over an eighth of a point.