Bigger Picture Bounce or Just Another Pre-Weekend Pause

Bonds were moderately to sharply weaker overnight and deteriorated further in the afternoon.  Given the strong move to 1.25% in 10yr yields the day before, you'd be well within your right to worry about a bigger picture bounce.  That said, the bond market is also well within its right to sell off 6bps in Treasuries and 3/8ths of a point in MBS on the Friday before it has to buy $120 bln of bonds and digest a new CPI in the first 2 days of the following week.  In other words, we may not get a great answer about big-picture bounces or pre-weekend pauses until next Wednesday.  

Econ Data / Events
Market Movement Recap
08:28 AM

Weaker overnight in a fairly linear move that started right at the open and continued through European hours.  10yr is up 4bps at 1.336 and 2.0 UMBS are down almost a quarter point.

11:34 AM

Fairly calm so far despite a bit of extra weakness in Treasuries (10yr holding right at the 1.35% technical level).  MBS have been flat since 8:30am, never more than a tick (0.03) away from those levels (down 0.22).

01:10 PM

Weakness accelerating as 10s break 1.35% ceiling (1.36% now).  MBS down 10 ticks (.31) on the day and an eighth of a point from the AM plateau.  No overt causes.  Just Friday afternoon leakage.