Today offers firm confirmation of the range breakout we'd been hoping to see this week. These sorts of breakouts are positive signals in the bigger picture, but risk-averse rate watchers can use them as early warning signs for short-term shifts. Today's video discusses this in greater detail.
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20min of Fed 30yr UMBS Buying 10am, 1130am (M-F) and 1pm (T-Th)
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ADP Employment 428k vs 950k f'cast, 212k prev
Bonds were modestly weaker overnight, but domestic buyers got an early start around 6:30am. With another slight boost from weak ADP data, Treasuries just turned positive and MBS are effectively unchanged.
Gains extending a bit now, with more friendly Fed-speak, this time from Williams. 10yr yields down 1.6bps on the day to .66% and 2.0 UMBS up 2 ticks (0.06) at 103-11 (103.34).
Comments from Fed speakers have generally been supportive. Bonds hit their best levels just before noon and have pulled back a bit since then. The bounce coincides with stock market strength. 10yr yields still down 2.3bps on the day at .649. UMBS 2.0 still up 2 ticks (0.06) at 103-11 (103.34).
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