Bond Markets Slightly Better Than 'Unchanged' With Some Help From Europe
The calendar of news, events, and economic data continues to be a lonely place. At times like this there are almost always quite a few other places traders can look for inspiration, but at the moment, we do know that European bond market movement is one of those.
Case in point, the drift higher in Treasury yields in June shares all major lows and highs with Germany's 10yr debt ("Bunds"). After a slow start to the week, activity picked up in Europe this morning and Bunds saw their first salient bounce to lower rates since last week's ECB Announcement.
Treasuries followed the bounce after putting in their weakest levels of the day at 4:30am. Incidentally, this occurred at 2.66, a potentially significant level noted in the Day Ahead.
While bouncing lower is always welcome when it comes to rates, today's bounce occurred at already weaker levels. That leaves 10's just under half a bp lower on the day at 2.631. For their part, MBS are outpeforming slightly (after underperforming into yesterday night's Roll.
Fannie 3.5s are up 4 ticks at 101-27. KEEP IN MIND, if you see charts of MBS today, it won't look like we're up 4 ticks, but again, this has to do with the Roll. The left side of the MBS chart shows June coupon prices (because June was the oldest MBS bucket trading until yesterday) and the right side shows July.