Decent Gains Despite Headwinds

Bond market participants rushed back into the office today with volumes at the highest levels since CPI and the Fed 3 weeks ago.  One major source of tradeflows was hefty slate of new corporate bond issuance.  This is normally a headwind that pushes rates higher.  The same is true for the large block trade that hit around 10:30am ET.  While both of these headwinds exerted their expected forces, bonds nonetheless scratched out moderate gains to begin the new year.  

Econ Data / Events
    • Construction Spending
      • 0.2 vs -0.4 f'cast, -0.3 prev
Market Movement Recap
09:16 AM

Stronger overnight, following an EU bond rally driven by data.  10yr down 9bps at 3.743.  MBS up 19 ticks (.59).

11:42 AM

Losses after 10:30am, kicked off by a large block trade at the CME.  10yr still down 4bps at 3.79, but up from 3.72 lows.  MBS still up almost 3/8ths, but down a quarter point from highs.

03:29 PM

Extra flat since 11am.  MBS still up just under 3/8ths of a point.  10yr still 3.79 with minimal deviation for the past 4+ hours.

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