There are three kinds of uneventful trading days: inconsequentially stronger, inconsequentially weaker, and unchanged. Bond markets stood a good chance to trade uneventfully today, and so far, they've drawn the "slightly weaker" card. This extends the losses from Friday morning, but in true uneventful fashion, the pace of the weakness has lightened up this morning.
The overnight session pushed 10yr yields about 2bps higher overnight, and after losing another bp, 10's are back where they began the domestic session at 2.617.
For their part, MBS are performing at least as well as Treasuries, and have even gained back more of their opening losses. Fannie 3.5s are up to 102-09 after opening at 102-08.
The economic calendar is empty and we've seen no headlines worthy of stopping the presses. Fed's Bullard was out earlier saying that the economy is as good as it has been and that if growth were to come in at 3% next quarter, the monetary policy "conversation" would change. He also mentioned an earlier potential lift-off time frame for the Fed Funds rate, but markets didn't seem to care.
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