Last Friday, we were already eyeing the technical ceiling at .79% and asking "was that it?" A the new week begins with what some might call incredibly even-keeled and relatively ample bond buying demand, the case for technical bounce is growing. The only caveat is that it's "month-end" (which can create some compulsory trading). Bottom line: it will be even more meaningful if these gains stick around tomorrow.
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20min of Fed 30yr UMBS Buying 10am, 1130am (M-F) and 1pm (T-Th)
Decent trading overnight. Treasuries lost less ground than European bonds and have been pushing back against modest weakness in the past 2 hours. MBS opening down 2 ticks (0.06). 10yr up 1.15bps at .736.
The bond market didn't find anything objectionable in the Clarida speech with yields continuing to fall in concert with stock prices. 10yr yields just turned positive on the day, albeit just barely. MBS are very close to doing the same.
Well into positive territory now, both for Treasuries and MBS. We can blame/credit one of two things: a technical bounce at the .79 ceiling and/or month-end bond buying. 10yr down 3bps to .695 and 2.0 UMBS up nearly an eighth.
Noticeable volatility leading up to and following the 3pm Treasury close. About half of the gains were erased and then returned in roughly a 30 minute window. Now back to the best levels of the day for both MBS and Treasuries.
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