MBS Live Day Ahead: Slightly Stronger Start After Weaker Construction Data

Today's only notable economic release is helping the bond market get off to a stronger start today.  New Residential Construction, came out weaker than expected with Housing starts at 1.569m versus a median forecast of 1.710m.  Labor and materials issues are implied by the fact that building permits were much closer to consensus (1.76 vs 1.77). 

With that, bonds were willing to add a bit more buying to modest overnight strength, but unless 10yr yields challenge 1.62%, the trend remains sideways to slightly weaker.  On the other hand, if yields aren't moving up and over 1.75%, the recently weaker trend exists inside a broadly sideways trend between 1.53 and 1.75.