Strong Data, But Even Stronger Sideways Grind

Bonds started the day in slightly weaker territory but moved very quickly to get back to unchanged levels.  After that?  Nothing!  10yr yields and MBS have both coasted sideways in ranges so narrow as to make observation and analysis obsolete.  Even stocks were unable to escape the flatness.  True, there's more time left to trade, but with 20 minutes to go, the S&P is almost perfectly unchanged vs yesterday.  Stronger econ data had no impact, and we don't anticipate a reliable data-driven response until Friday's NFP.

Econ Data / Events

  • Fed MBS Buying 10am, 1130am, 1pm

  • Case Shiller Home Prices (y/y)....14.9 vs 13.4 prev
    FHFA Home Prices (y/y).............15.7 vs 14.0 prev

  • Consumer Confidence 127.3 vs 119.0 f'cast, 120.0 prev

Market Movement Recap
08:42 AM

Mostly flat overnight in quiet trading, but slipping slightly at the domestic open with most of the weakness seen right after the 8:20am CME open.  10yr yields are up 2.3 bps at 1.507 and 2.0 UMB are down an eighth.

12:13 PM

As expected, no reaction to any of this morning's econ data.  Bonds gradually drifted back to unchanged levels after sellers led the charge earlier this morning.  

03:33 PM

Little to report as there's been little by way of movement.  10yr TSYs crossed the 3pm close almost perfectly unchanged at 1.48.  Similar story for UMBS 2.0 coupons, trading just a hair under 101.