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Big Gains Overnight After Summers Exits Fed Race; Holding After Data
Posted to: Micro News
Monday, September 16, 2013 8:56 AM
With Japan out on Holiday, US Treasuries began the overnight session with futures trading only (vs. "cash," which would normally be trading as well. That merely means that we have to extrapolate where 10yr yields would have been at their best levels of the night, after Larry Summers announced he was pulling out of the race for the Fed Chair.
The initial surge in prices took Treasury futures to levels consistent with yields in the mid-to-high 2.7's though they'd fallen back a bit by the time cash Treasuries actually began trading in Europe.
Even so, yields were sharply lower--hovering near 2.8 to 2.82 ahead of the domestic session and are currently pushing down into the 2.7's (2.789 currently).
MBS opened roughly 20 ticks stronger and have gained another 3 ticks since then, bringing Fannie 4.0s over 103 (103-10 currently) for the first time since August 30th.
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