In the day just passed, bonds weakened abruptly in the overnight session--mostly due to strong European economic data.  Traders were also cautious ahead of Fed Chair Powell's congressional testimony.  When the prepared remarks for Powell's appearance were released, however, bonds came roaring back, moving from 2.10+ to 2.04% in short order.  They battled the 2.06/2.07 pivot point into the close.

In the day ahead, bonds will continue deciding what to do about that important technical level.  They've done this one other time before in recent memory (highlighted in the chart below).  So far this morning, stronger CPI data is leading yields up and over the 2.07%, but the day is young.  We still have another round of Powell Testimony and the 30yr bond auction.

2019-7-14 deciding

The bigger picture technicals are decidedly bearish, arguing for a momentum shift and a longer-term bounce off a floor just under 2.0% in 10yr yields.  The momentum technicals (like the stochastic oscillators at the bottom of the following chart) seem to clearly indicate that the bounce is underway.  There's no such thing as an accurate gauge of future market movement, however.  These technicals only tell us what's already happened.  Certains scenarios may be more likely than others, but there are certainly examples of the technicals indicating a big bounce only for that bounce to fizzle and the rally to continue.

2019-7-11 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 : -0-02
Treasuries
10 YR
2.0800 : +0.0190
Pricing as of 7/11/19 9:06AMEST

Tomorrow's Economic Calendar
Time Event Period Forecast Prior
Thursday, Jul 11
8:30 Core CPI (Annual) (%)* Jun 2.0 2.0
8:30 Jobless Claims (k) w/e 223 221
10:00 Powell Congressional Testimony (part 2) *
13:00 30-Yr Bond Auction (bl)*