Even before this morning's economic data, bond markets were already in slightly stronger territory. The data itself only helped, though it's a double-edged sword for the Housing Market. New Home Sales hit a 9 month low, falling to a 384k unit annual pace versus a 450k forecast and 449k previous reading.
Treasuries and MBS ratcheted to their best levels of the day after the data, and extended gains further after the Fed's daily buying operation in 10yr Treasuries. Fannie 4.0s were up as much as a quarter of a point, but the rally has moderated somewhat ahead of the 1pm Treasury Auction of 5yr Notes.
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