Word on the street is that car chases and scandals are more interesting than today's trading action. Perhaps with it's lack of data, today is an implied holiday in order to create symmetry with the official holiday on Friday. Tomorrow is fairly data rich, and one of only 3 days with that particular resource this week. With quarter end still not behind us, still no prepay report or Class A settlement, still no <fill in the blank...>, we're happily tracking tsy's just like old times although they've been outperforming a bit.
And so it is that the market range trades, day trades, and vascillates in a narrow range. NOTE: the y axis range on the MBS chart may make it look like it's chopping about more than tsy's, but it's simply a scaling issue. Against the scope of recent weeks, both MBS and tsy's have been in very narrow ranges today. Floaters are good. Preemptive lockers are good too as one never knows what the action packed day tomorrow will bring. But in general, we like that the 10yr has broken 3.5 today and not gone back above save for a brief test at 3.51. Now, if only there were sufficient flows to put much stock in that as a meaningful occurrence.
2s/10s : 238bps - more price improvements in the long end today, aka "flattener," aka, 2s/10s narrows (gets lower).
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