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Bond Markets Stronger Overnight; Actively Testing Last Week's Highs
Posted to: Micro News
Tuesday, September 24, 2013 9:06 AM
At a glance:
- Flat to start overnight session
- Slightly stronger in Europe, German data/ECB help
- Still in positive territory this morning, but blocked by long term resistance so far in Treasuries.
Both Treasuries and MBS are close to their highest prices from last week, seen in the wake of the FOMC Announcement. Treasuries aren't quite there yet (2.68 this morning vs 2.673 briefly last Wednesday), but MBS are slightly better (Fannie 4.0s at 104-12 this morning vs 104-08 on Thursday).
We've managed to return to these outer boundaries quite gradually over the past 3 sessions and this morning's overnight session was no exception. Treasuries were flat and inactive during Asian hours, perking up a bit into the European session with some help from weaker Economic data in Germany and most recently after supportive comments from ECB board member Coeure.
The latest push toward positive levels came right at the open of the CME, when Treasury Futures floor trading starts and liquidity begins ramping up for the day. It's notable then, that resistance has remained in place for Treasuries despite that increased volume. A sincere break into better territory may require a sincere miss in the 10am Consumer Confidence data.
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