While the overnight sessions was relatively uneventful, the first half of the domestic session has seen some decent volatility. After starting out in positive territory, bond markets sold off fairly quickly starting around 9:30am.
Chicago PMI was weaker than expected, but Treasuries and MBS continued to lose ground until just after 10am. That's a bit of a paradox considering 10am was the day's only piece of exceptionally strong economic data. Pending Home Sales rose at the quickest pace since the 2010 first-time-homebuyer tax credit, reaching the best levels since mid 2013.
Whatever the original motivation may have been for selling bonds, it had run its course by 10:04am and we've been improving gradually ever since. MBS are now back well into positive territory and 10yr yields are down just over 1bp, both near the middle of Friday's ranges.
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