In the day just past, bond markets weakened at a reasonably quick pace.  The initial motivation was a headline regarding the prospects of a US/China trade deal in the overnight session.  Even though it was later corrected to be much less promising, much of the weaker reaction in bonds remained intact.  This makes sense from a technical standpoint as the charts suggested more room for yields to move higher in the current consolidation trend.  A poorly-received 5yr Treasury auction at 1pm added to the selling.

In the day ahead, bonds will get a chance to digest a smattering of economic reports including the final read on G1 GDP (not as big of a market mover as this is the 3rd time seeing these numbers (plus they're from Jan-Mar... pretty old).  Pending Home Sales at 10am offers the most timely look at the housing market of the major sales reports.  And the 7yr Treasury auction rounds out the week of bond market supply.

Of greater interest than the data/auction will be any potential headlines coming out of the G20 summit.  There's already one report from the WSJ indicating that Xi will present Trump with terms to settle the trade fight.  Earlier in the overnight session, the South China Morning Post (you haven't heard of it either?) reported that a tentative agreement had been reached.  The fact that word is spreading around bond market campfires about some random headline in a Chinese newspaper is far more important than whatever it is that the newspaper said.  It's evidence of just how hungry traders are for trade war developments.

2019-6-27 open


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 3.0
100-24 : +0-04
Treasuries
10 YR
2.0350 : -0.0140
Pricing as of 6/27/19 8:41AMEST

Tomorrow's Economic Calendar
Time Event Period Forecast Prior
Thursday, Jun 27
8:30 GDP Final (%) Q1 3.1 3.1
8:30 Jobless Claims (k) w/e 220 216
10:00 Pending Sales Index May 104.3
10:00 Pending Home Sales (%) May 1.0 -1.5
13:00 7-Yr Note Auction (bl)* 32