Yesterday presented a short-term, small scale threat to the bond market’s happy little range.  Today’s strength has done a good job of minimizing that threat and reinforcing the range.   

Econ Data / Events

  • 20min of Fed 30yr UMBS Buying 10am, 1130am (M-F) and 1pm (T-Th)

  • Jobless Claims 837k vs 850k f’cast, 873k prev

  • Core PCE Inflation 1.6 vs 1.4 f’cast, 1.4 prev

  • ISM Manufacturing 55.4 vs 56.3 f’cast, 56.0 prev

Market Movement Recap

08:46 AM

Bonds were gradually weaker overnight and stocks were gradually stronger.  The 8:20am CME open brought out more sellers, and while stronger econ data at 8:30am may not be hurting as much as it may seem, it’s definitely not helping.  10yr is up almost 3bps at .714 and 2.0 UMBS are down an eighth of a point on the day.

11:45 AM

AM weakness continued into the 9:30am NYSE open before stock losses helped bonds recover.  Weaker ISM data didn’t hurt.  Downbeat stimulus headlines rounded out the bond market recovery, bringing 10s and MBS very close to unchanged on the day.

02:41 PM

Losses were fully erased heading into the PM hours and bonds have been holding on the green side of ‘unchanged,’ though just barely.  2.0 UMBS are up 2 ticks (0.06) at 103-14 (103.54) and 10yr yields are effectively unchanged at .683%.