Today wasn't going too terribly poorly for the bond market in the first place even though 10yr yields were technically confirming a negative move up and out of the recent range. The afternoon complicated the outlook as Trump's Tweets on Stimulus threw both sides of the market for a loop. Today's video discusses whether or not this is enough to reconsider our range breakout verdict.
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20min of Fed 30yr UMBS Buying 10am, 1130am (M-F) and 1pm (T-Th)
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International Trade -67.1 bln vs -66.1 bln f'cast, -63.4 bln prev
Bonds were flat to slightly stronger at the start of the overnight session but moved fairly up fairly quickly as domestic traders clocked in for the day. Stock prices led the move, but it's not substantial--more of an "insult to injury" scenario where the insult portion isn't the end of our world just yet. 10yr yields are up less than 1bp on the day at .787 and 2.0 MBS are down 1 tick (0.03) at 103-06 (103.19).
Quick jump into positive territory at the 9:30am NYSE open. Yes, that's for stocks, but bonds are also stocks when you consider bond-based ETF trading as well as simple asset allocation trading (i.e. money managers selling stocks and needing a different place to put the money). 10yr yields are now DOWN almost a bp and 2.0 UMBS are up an eighth.
3yr auction was decent enough to not have a noticeable impact on longer-term bonds. MBS and Treasuries are both in a symmetrical sideways consolidation (higher lows and lower highs occurring at regular intervals, aka a perfect sideways triangle). 10yr yields are holding under the .79% technical level (.777% currently) and 2.0 UMBS are up 2 ticks (0.06).
Trump tweet re: no stimulus until after election causing massive sell-off in stocks and a sharp rally in bonds. S&P futures off 1.3% in short order. 10yr yields down 4bps to .738 and 2.0 UMBS up an eighth.
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