Bonds Leveling Off But Not Out of The Woods

Bonds began the day with a test of the important technical ceiling at 1.37% in 10yr yields.  With some help from geopolitical risk due to bombings in Kabul, bonds managed to stay fairly calm with the 10yr just a hair better than 'unchanged' at the 3pm CME close.  MBS also found their footing and were 2 ticks (0.06) higher at the same time. We're not out of the woods yet though.  Tomorrow brings Fed Chair Powell's Jackson Hole speech in the afternoon.  More than a few traders moved to the sidelines this week for this event.  They're ready to jump back in based on what Powell says (as either buyers or sellers).  

Econ Data / Events

  • Fed MBS Buying 10am, 1130am, 1pm

  • Jobless Claims 353k vs 350k f'cast, 349k prev

  • Q2 GDP (1st revision) 6.6 vs 6.7 f'cast

Market Movement Recap
09:48 AM

Slightly stronger and mostly flat during Asian hours followed by moderate weakness during the European session.  10yr yields up less than 1bp at 1.356.  UMBS 2.0 coupons are down 6bps (2 ticks).  No significant data this AM.  

11:04 AM

Bonds turning green after Kabul bombing headlines (more details here)

12:54 PM

Bonds back in negative territory ahead of the 7yr Treasury auction. 10yr up 1bp to 1.359 and UMBS 2.0 down almost an eighth of a point.

01:20 PM

A hair stronger after decent 7yr auction.  Bonds roughly unchanged now with 10yr just over 1.35% and MBS +0.00 at 101-03 (101.09).