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For 3rd Straight Day, Bonds Flat Overnight, Slightly Stronger After Data
Posted to: Micro News
Friday, January 17, 2014 9:14 AM
If the overnight activity in Treasuries showed up on your 2-day chart, it would look like a very flat, very calm extension of yesterday afternoon's flat, calm trading range. Something like this:
[Image or graph removed from email. View full article with images]
Once again, the first hour of trading has served to confirm and/or improve upon the overnight trend (3rd day in a row now), though the movement hasn't been huge. Chalk that up to the relatively close-to-consensus print in Housing Starts. Details of that report:
- Housing Starts -9.8 pct, most since April
- Starts 999k unit rate vs 990k forecast, 1,107k previously
- Permits 986k vs 1,015k forecast
- Single Fam starts -7.0 pct, Multi Fam -14.9
- Market Movement Thoughts: We don't put much stock in the "biggest drop since April." This report is a moderate market mover when far from consensus, and at 999k vs 990k forecast, this is not far from consensus. The tepid reaction reflects that.
- Full Release
Treasuries and MBS mildly extended their gains following the data. Fannie 4.0s are 3 ticks higher at 104-01 and 10's 1bp lower at 2.836. Industrial Production is coming up presently.
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