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Bond Markets Slightly Weaker After Data
Posted to: Micro News
Tuesday, October 29, 2013 9:01 AM
10yr Treasuries opened the overnight session moving into weaker territory (higher yields) accompanied by mini-rallies in equity indices. They leveled off before cresting 2.531 and haven't move higher since.
European hours saw things bounce back for bonds despite more slow and steady improvements in equities. But 10's bounced at 2.509 and headed back in the other direction into the domestic session--opening near unchanged, along with MBS.
Both moved slightly weaker following the as-expected Retail Sales and PPI data sets. In both cases, the headline data was actually weaker than forecast, but the "core" readings (which strip out more volatile components) weren't any more bond-friendly than the default environment.
The volume response to the important and long-awaited report was underwhelming at best. If bond markets were excited, in any way, to see Retail Sales, we wouldn't know that based on today's reaction. As for now, support has held at weaker levels (but just barely) and we're waiting to see if any of the day's remaining data changes that, or helps us challenge the stronger levels.
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