The 2nd week of April begins with bonds threatening to embark on another bounce inside the post-election trading range (10yr yields from 2.30-2.64, approximately).  We're at the early stages of the potential bounce at the moment, but the current patterns are looking similar to the bounce that occurred in Dec/Jan.  Short and long-term momentum metrics are also starting to point more clearly toward higher yields.

2017-4-10 open

All that having been said, the negativity is merely the vote cast by the technical analysis.  Fundamentals (all the external factors that can affect bond tradings, like data, news, Fed policy, and supply/demand fluctuations) are in less agreement.  Increasingly fundamentals tend to support bond market resilience, at the very least.

We can't say fundamentals wholly support an outright rally.  The Fed's ongoing efforts to remove accommodation are the 800lb gorilla in the room there.  But the previous gorilla--hopes for the new administration to effect policy changes that push growth and inflation--is looking more like a 3 or 4 hundred pound gorilla, or perhaps some sort of less threatening primate.  It's not that fiscal policy is no longer a threat--just not the immediate and massive threat that bond markets were gearing up for heading into the end of 2016.

In terms of this week's specific events, there isn't much going on--at least not compared to last week, and at least not when the market will be open.  Bond trading will be closed on Friday in observance of the Good Friday holiday (though banks will be open--i.e. it's not a Federal holiday).  Because of that, bonds face an accelerated auction schedule with 3yr Notes today (followed by 10 and 30yr Treasuries on the next 2 days respectively).  Interestingly enough, essentially all of the top tier data (CPI and Retail Sales) hit on Friday (and thus, not have an opportunity to move markets at the time of its release).

As a reminder, there is no scheduled analysis on days when bond markets are closed.


MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
MBS
FNMA 3.5
102-15 : +0-01
Treasuries
10 YR
2.3732 : +0.0002
Pricing as of 4/10/17 8:56AMEST

Tomorrow's Economic Calendar
Time Event Period Forecast Prior
Monday, Apr 10
13:00 3-Yr Note Auction (bl) 24
Tuesday, Apr 11
13:00 10-yr Note Auction (bl)*
Wednesday, Apr 12
8:30 Import prices mm (%)* Mar -0.2 0.2
8:30 Export prices mm (%)* Mar 0.1 0.3
13:00 30-Yr Bond Auction (bl)*
Thursday, Apr 13
8:30 Producer Prices (%) Mar 0.0 0.3
8:30 Initial Jobless Claims (k)* w/e 245 234
8:30 Continued jobless claims (ml)* w/e 2.028 2.028
10:00 Consumer Sentiment Prelim Apr 96.5 96.9
14:00 Good Friday *
Friday, Apr 14
8:30 Retail sales mm (%)* Mar -0.1 0.1
8:30 Core CPI Year/Year (%)* Mar 2.3 2.2
10:00 Business inventories mm (% ) Feb 0.3 0.3