Super Slow Day; Still Waiting For Breakout

Whether it's the narrow range between 1.62 and 1.68% in 10yr yields or the wider 1.53-1.75%, bond watchers continue waiting for evidence of a breakout.  It certainly didn't arrive today, and even if it did, the ultra low volume profile would argue against reading too much into it.  Despite the broadly sideways trends, when put under a microscope, charts offer more examples of "higher lows" in bond yields than "lower highs."  As such, those who are truly on a fence (with respect to lock/float strategy) might err on the side of caution until some contrary evidence comes along.

Econ Data / Events

  • Fed MBS Buying 10am, 1130am, 1pm

  • NY Fed Manufacturing 24.3 vs 23.9

  • Homebuilder Confidence 83 vs 83 f'cast, 83 prev

Market Movement Recap
08:29 AM

Bonds were slightly stronger in Asia, but lost ground in Europe, following a much sharper sell-off in European bond markets.  10yr yields are starting the domestic session up less than half a bp and MBS are down only 1 tick (0.03).

11:45 AM

No big market movers in play and no major change since the last update.  EU bonds leveled off and the worst seems to be over for that trading session.  Treasuries and MBS are both still in line with previous levels and haven't strayed far enough from there to count.

03:27 PM

MBS at weakest levels, but not for any particular reason and not in a very threatening way.  2.5 UMBS coupons are only down 2 ticks at 103-13 (103.41).  10yr yield still in same range for the day, up less than 1bp at 1.642.