In late July, bonds rode a wave of momentum toward lower yields with many traders targeting the 1.25% zone in 10yr Treasuries. That floor was broken on Monday July 19th.  The rally extended to 1.128% before bouncing moderately.  Another attempt was made in the week before last, but 1.128% held firm again.  Heading into last week's bond market supply, yields spiked, but bounced firmly at the 1.37/1.38% technical level. 

These juxtaposed bounces make decent sense.  After 4 months of rallying and a break of the 1.25% target, it was no surprise to see rally momentum stall out.  It was just as logical to see sellers shy away from a more aggressive move higher given the recently lackluster econ data, increasing covid concerns, and the passing of a heavy dose of supply. 

20210819 open2.png

We're now in a period of indecision, waiting for clarity from Powell next week and covid in general. The center of the range is 1.25% until further notice (incidentally, the mid-point of the recent ceiling/floor bounces).  Bonds aren't looking eager to stray too far from that mid-point so far today.


MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
MBS
UMBS 2.0
101-13 : +0-03
Treasuries
10 YR
1.2450 : -0.0280
Pricing as of 8/19/21 11:23AMEST

Tomorrow's Economic Calendar
Time Event Period Forecast Prior
Thursday, Aug 19
8:30 Philly Fed Business Index * Aug 23.0 21.9
8:30 Continued Claims (ml) w/e 2.800 2.866
8:30 Jobless Claims (k) w/e 363 375
10:00 Leading index chg mm (%) Jul 0.8 0.7