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Bond Markets Back to Pre-Shutdown Levels Following Debt Deal
Posted to: Micro News
Thursday, October 17, 2013 9:44 AM
After gaining half a point yesterday, Fannie 3.5s are already 3/8ths of a point higher this morning. Most of those gains were already intact by the time MBS began trading, and came courtesy of last night's passage of the Senate-drafted debt deal that dominated yesterday's headlines.
The promise of said deal indirectly fueled an afternoon rally in Treasuries and broader bond markets. The pace had leveled off by the close, though retained a mildly positive bias through Asian trading hours. When Europe came online for the day, overnight Treasuries received another shot of bullish adrenaline, pushing 10yr yields back down to 2.61's by 4am.
There has been some ebb and flow since then, but 10's have gone no higher than 2.634 and the domestic session has been uneventfully positive so far. Jobless Claims data was mostly passed over as traders give it time to calm down and exhibit more consistency before reading in to the numbers. Philly Fed data is coming up at 10am and has a better chance to illicit a reaction.
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