It's been a light week in terms of scheduled data and events with the power to motivate bond market volatility. Today wasn't much of an exception although one must always give a wider berth to any official communication from the Fed. In today's case, the Minutes from the most recent meeting (3 weeks ago) were 100% as-expected. Bonds logically ignored the Fed and continued trading in the new, sideways range--a hopeful, short term development that we'd like to see turn into a longer-term development. 1.62/63% continue offering resistance to bigger rallies in terms of 10yr yields.
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Fed MBS Buying 10am, 1130am, 1pm
Fairly quiet overnight: flat in Asia, stronger in Europe at first, but gains erased ahead of US hours. 10yr is currently unchanged at 1.656. UMBS 2.5s are also unchanged at 102-31 (102.97).
Steady, modest rally since 9:30am ET with the NYSE session being the only overt motivation (i.e. money manager allocations and/or bond ETFs driving trade). 10yr yields now down almost 2bps at 1.64%. 2.5 UMBS up 2 ticks (.06) at 103-01 (103.03).
Rally fizzled at noon and bonds have been modestly weaker since then. Both MBS and Treasuries are back to 'unchanged' on the day.
No real reaction to Fed Minutes. Bonds still trading flat vs 2pm levels (same as 'unchanged' day-over-day levels from last update).
Modest weakness for Treasuries after the 3pm CME close. This is a tradeflow-driven move based on the time of day rather than any new events or data (even though the Consumer Credit report coincided with the losses). 10yr yield now up 1.2bps at 1.67%. MBS are UP 1 tick (0.03) trading just under 103.
MBS Market Alerts
