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Bond Markets Hold Close to Yesterday's Weakest Levels; Supportive Bounce For Now
Posted to: Micro News
Wednesday, September 18, 2013 9:43 AM
Treasuries tell a better story than MBS today as the latter are just a bit outside yesterday's range. Treasuries, on the other hand, are perfectly defined by yesterday's range. Overnight low yields stopped just before hitting yesterday's lows before rising steadily to yesterday's highs.
Housing starts were merely a bump in that road, if anything. While the headline was weaker than expected, the internals showed that single-family construction was actually pretty strong. This may have added a slight bit of pressure to bond markets, but it's hard to pick out from the prevailing trend from 4am
Bank of England's lack of policy change is being credited with that weakness, but it looks like European bonds 'cared' while Treasuries did was they were going to do anyway.
For their part, MBS opened up in line with yesterday's latest levels and fell a few ticks before the Housing Starts data and another tick after that. Fannie 4.0s dipped to 102-25 from 102-28 opening highs, but are holding ground at 102-26 currently.
Economic data is done for today, and all eyes are on the afternoon's FOMC Events. The Announcement (the document that may spell out tapering plans) and the economic projections are out at 2pm while Bernanke's Press Conference BEGINS at 2:30pm, creating tape-bomb potential until at least 3pm.
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