As is frequently the case for Monday's during the summer, bond markets have not been very active. Trading levels have remained in a narrow range as well, with Fannie 3.5s occupying only about a quarter of Friday's range.
Moderate weakness was intact from the overnight session. Treasury yields opened higher in Asia and have drifted less than 2bps higher since then. Pressure continued during the European session as stocks and bond yields move higher together.
There was no significant reaction to the NAHB Housing Market Index data. Incidentally, it was released a few minutes early, and came in slightly stronger than expected. At the very least, we could conclude that it did nothing to help stem the modestly weaker trend.
Bond markets are currently staying near their weakest levels of the day as the European session wraps up. "Weakness" is relative, however, as this is one of only 2 days this year where 10yr Treasuries are trading under 2.40.
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