You know things are bad when I resort to invoking Kierkegaard in bond market commentary, but that's what it's come to.  Our quest to observe something interesting in terms of rate momentum is beginning to feel hopeless.  In fact, if someone wanted to be a real whiner about it, they could make a very strong case for another year of sideways momentum, or close to it.  They would be like Kierkegaard's Knight of Infinite Resignation (at least I think they would...)

I took one philosophy class in college, and the lesson on these 2 stony knights is one of the only things I remember.  Basically, one is a pessimist who thinks he's just being a realist.  He believes there are solid reasons that he will never win the love of the princess.  So he gives up and finds his own sort of peace in that, despite basically devoting his life to imagining what being in love would be like.

The Knight of Faith, on the other hand, has 99% of the same beliefs except that he has faith things will eventually go his way due to the "absurd virtue of God."  

Although these Knights were just Kierkegaard's way of trying to convey some sort of religious lesson, there's still something profoundly true about resignation and pessimism versus faith and optimism.  There are also parallels to the saying "can't see the forest for the trees."  The Knight of Resignation is just seeing the trees--or in our case, the incessant exile inside an ever-narrower range of 10yr Treasury yields--and concluding this range is all there is (even though one can imagine and even lust after something greater).  The Knight of Faith, on the other hand, also sees the narrow range, bathes in its claustrophobic implications, but maintains faith that this too shall pass.  The Knight of Faith doesn't know how or when, but he will get the princess!  

I don't know how or when, but we will see the tediously sideways range broken in the bond market.

In terms of less philosophical nuts and bolts, we have 1.85% overhead and 1.74% underfoot as nearby pivot points.  1.95% remains the bigger-picture ceiling (as long as yields are under that, we're not really moving out of the "low range" invoked by the mid-2019 trade war drama).  Momentum technicals are currently favorable with both fast and slow stochastics aligning and showing a bit of room to run as seen in the chart below.

20200122 open

Today's only quasi-significant economic data is Existing Home Sales at 10am.  Apart from that, there is sure to be some headline-following with respect to coronavirus developments and perhaps some phantom-upward pressure on yields from corporate bond issuance.


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
101-24 : +0-01
Treasuries
10 YR
1.7690 : +0.0000
Pricing as of 1/22/20 9:49AMEST

Tomorrow's Economic Calendar
Time Event Period Forecast Prior
Wednesday, Jan 22
7:00 MBA Purchase Index w/e 303.9
7:00 Mortgage Refinance Index w/e 2444.7
9:00 Monthly Home Price yy (%) Nov 5.0
10:00 Existing home sales (ml)* Dec 5.43 5.35
10:00 Exist. home sales % chg (%)* Dec 1.3 -1.7