Bond Markets Unchanged Overnight, Slightly Improved into Domestic Session
It's plain for all to see that the first three mornings of the week are devoid of meaningful economic data. As can often happen in such cases, markets watchers turn their attention to whatever else they can get their hands on, whether it be a legitimate market-moving consideration or purely something to stave off boredom. Case in point, there are several news stories making the rounds, including a Hilsenrath piece on the need for the Fed to change how it provides guidance on rates as well as a Financial Times story on how any outcome at the June ECB meeting will be a surprise.
If those news stories sound boring and confusing with respect to applying them to potential market movements, they are! The point is that they're near or at the top of the heap of what's being talked about today. The fact that they couldn't matter much less is a testament to how little is going on, not to mention markets' incessant need to find meaning in their day to day existence, even if that means fabricating its own backstory.
The point to that point is that it's a slow morning. It just so happens that it's a "good slow" so far today as bond markets have moved into positive territory after following European bond markets higher in yield overnight. Actually the first part of the European session saw some improvement, but it was eclipsed by weakness heading into 8am.
Fannie 3.5s are currently up 5 ticks,w which is right in line with the middle of Friday's range. 10yr yields are down 1.5bps, also roughly mid range, and respectably higher than the 2.47 long-term inflection point.