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Quiet Overnight, Quiet Morning, But Not Without Risks
Posted to: Micro News
Friday, March 15, 2013 9:14 AM
Keeping in the recently espoused theme of the "post-NFP consolidation" between 2.0 and 2.075 (in terms of 10yr yields), Treasuries had a super sideways and narrow overnight session. The trading range was roughly 1.5 bps between 2.03 and 2.045. The tight range and light volumes bring us that much closer to making it through to next week without major drama, but it is a "quadruple witching" day, which can create tradeflow-related volatility.
MBS opened up right in line with yesterday's latest levels and has continued to trade fairly tight, between 102-12 and 102-15 through the first two pieces of data this morning. It's not that CPI or Empire State Manufacturing were exceptionally likely to move markets, but their uneventful passing brings us that much closer to the end of the week.
Industrial Production is coming up in 1 minute with Consumer Sentiment following at 9:55am. Bottom line: hoping to hold calmly sideways, but prepared for tradeflow-inspired volatility. It could also come from a big miss or beat in one of the upcoming data sets, which we'll see shortly.
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