Today was a fine day for bond markets. There were no significant gains or losses by the closing bell, and indeed no real drama in between. Treasuries began the overnight session in slightly stronger territory and began losing ground after European markets bottomed out (stock prices and bond yields) just before 7am.
Negative momentum persisted into the domestic trading hours and initially got a push from stronger-than-expected CPI data. With stocks and oil beginning to decline a mere 10 minutes later, bonds weren't keen to continue losing ground (thus making the CPI-related weakness look more like a cover for other trading motivations). 8:45am began the consolidation that would set the range for the rest of the day. In a general sense, markets punted when it came to deciding on the next strong move.
MBS experienced enough volatility for a few positive and negative reprices. Despite Fannie 3.0s ending the day 2 ticks weaker, lenders had enough margin in place after yesterday's volatility for today's rates to be slightly lower on average.
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