Slightly Weaker Today, But Still In The Recent Range

Thursday proved to be a very forgettable session for the bond market with trading levels technically weaker on the day, but right in line with most of Wednesday's trading.  MBS were actually a bit better than that with prices ultimately making it back to 'unchanged' levels even as 10yr yields remained 2-3bps higher.  In the bigger picture, the new, lower rate range persists.  Weaker GDP data and a weaker 7yr auction did nothing to challenge it.

Econ Data / Events

  • Fed MBS Buying 10am, 1130am, 1pm

  • GDP 6.5 vs 8.5 f'cast, 6.3 prev

  • Jobless Claims 400k vs 380k f'cast, 424k prev

  • Pending Sales -1.9 vs +0.3 f'cast, +8.3 prev

Market Movement Recap
08:16 AM

flat to slightly weaker overnight.  EU econ data added to weakness around 4am, but we're still in the recent range.  10yr up 2.3bps at 1.261%.  MBS down less than an eighth.

08:42 AM

Initial reaction to data was modestly stronger, but both MBS and Treasuries have now returned to pre-data levels (same as the last update).

03:42 PM

Sideways to slightly stronger all day. Modest rally at 11am in Treasuries mainly (chalked up to month-end and corporate bond hedging flows). Then more weakness into (and out of) the 7yr auction.  Net effect=MBS and TSYs still in the same range set in the first hour of trading.