Econ data, Treasury auctions and Fed speakers all failed to move the needle. Bonds only showed signs of life in response to new corporate debt issuance and a big sell-off in stocks. The net effect left Treasuries and MBS effectively unchanged. No surprise in the current environment!
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20min of Fed 30yr UMBS Buying 10am, 1130am (M-F) and 1pm (T-Th)
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FHFA Home Prices (y/y, Jul) 6.5 vs 5.8 prev
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Markit PMI 54.4 vs 54.6 previously
No surprises here relative to the recent playbook. Stocks drifted modestly higher overnight and bond yields followed. 10yr notes are currently up half a bp at .676 and 2.0 UMBS are down 1 tick (0.03) at 102-31 (102.97). No major reaction to the just-released Markit PMI data.
Corporate bond issuance is adding a bit of pressure here. 10yr yields are up a quick 1bp in the past 20 minutes and MBS have turned negative by 1 tick (-0.03). Here's the primer on how corp issuance causes these issues.
Corporate bond weakness leveled off and the 5yr Treasury auction was strong enough to help reinforce the ceiling for now. 10yr yields are 1.3bps higher on the day at .684 and MBS are near their best levels (unchanged on the day) just a half a tick under 103.0
Big drop in stocks in the past hour--enough to be of some benefit to the bond market. S&P futures off more than 2% now. 10yr yields almost back to positive territory. 2.0 UMBS are off in their own world, still trading the same sideways range as yesterday, and still at 103.00
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