What a difference a week makes! Last week, the order of the day was to lament the negative momentum shift that took bond yields up and out of established ranges. Now we're already in a position to confirm a return to those ranges.
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11:30-11:50 AM (ET) - Fed 30yr UMBS Buying
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Jobless Claims roughly as-expected, with Continued Claims slightly higher than expected.
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Producer-level inflation fell again, with the annual core reading dropping to 0.3% vs 0.6% last time.
Bonds sharply stronger overnight, this time more in response to stock market weakness than Fed announcement follow-through. 10yr yields more than 5bps lower at .68%. UMBS 2.0 starting to struggle with the altitude, but nonetheless up nearly a quarter point trading around 102.375.
More stock market weakness and more bond market gains. 10yr yields down 6.5bps to .671. UMBS 2.0 coupons up nearly 3/8ths of a point now. Nothing behind the move apart from the risk-off move driven by stocks although the Fed's re-commitment on bond buying doesn't hurt.
Bonds have leveled off at this point, but haven't jumped back up toward higher yields. The 30yr bond auction passed without a trace. UMBS 2.0 coupons are still more than a quarter of a point higher. 10yr yields are roughly unchanged from the last update (.669%)
10yr yields bounced at 3pm despite an ongoing rout in stocks. MBS have been losing ground steadily since 2pm and more precipitously (relatively) since 3pm. Not much behind these moves apart from a reshuffling of trading positions after 2 frantic weeks of volatility.
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