Can The Good Times Keep Rolling?

Referring to the past 3 days as "good times" is questionable.  Perhaps "times" would be better?  Still, the past 3 days are definitely good compared to where bonds left off at the end of last week.  Either way, the important question is whether rates/yields can continue making progress toward lower levels.  Anything's possible, but significant progress will require significant fundamental motivation (weaker data, uptick in covid, etc.).  For now, we're still viewing this as a consolidation of the past 3 weeks of losses with the next big move remaining a mystery.

Econ Data / Events

  • Fed MBS Buying 10am, 1130am, 1pm

  • Producer Price Index
    - 0.5 vs 0.6 f'cast (m/m)
    - 6.8 vs 7.1 f'cast (core, y/y)

  • Jobless Claims 293k vs 319k f'cast, 329k prev

Market Movement Recap
08:48 AM

unchanged to slightly stronger overnight.  A bit of weakness from 7:15 to 8:40, but back into stronger territory now.  10yr down 1bp at 1.533 and 2.5 UMBS up 2 ticks (0.06) at 102-26 (102.81)

01:34 PM

Modest improvements through the noon hour.  A bit of a bounce since then, but 10yr yields still down 1.9bps at 1.523%.  MBS are still up an eighth on the day--very close to the best levels.

04:22 PM

Still mostly sideways this afternoon, but closer to the stronger levels in the final hour.  10yr down 2.8 bps at 1.514 and 2.5 UMBS up 5 ticks (.19).