Trade Gap a Non-Event; Bond Markets Stay Close to Unchanged
The overnight session was underwhelming with little movement in Treasuries during Asian or European hours. By 8:30, 10yr yields were less than 1bp lower than yesterday and Fannie 4.0 MBS only 1/32nd higher.
The International Trade report was so extremely unimportant to markets that it won't even get it's own separate update this morning, but for record-keeping purposes:
- Trade deficit $34.25 bln, lowest since Oct 2009
- Forecast had been $40.0 bln
The 5 minutes following the data were about the slowest of the day--not typical behavior after data that matters.
Thankfully, if there's any bias to the day so far, it's a positive one for bond markets. Fannie 4.0s are currently up 3 ticks at 103-10 and 10yr yields are down 1.26bps at 2.9484. The afternoon has a few events: a 3yr Note auction at 1pm (usually not much of a market mover if at all) and a speech from San Francisco Fed's Williams at 2:30pm.