Range Finding Ahead of Auctions and CPI

The start of the new week saw bonds start at unchanged levels, rally somewhat sharply inside Friday's range, and then sell off more slowly/gently.  The net effect was a modest improvement by the end of the day.  Analysts were affected by confusion over what's driving the price action.  There were no standout market movers in the news or on the econ calendar.  A NY Fed survey that showed cooler inflation made sense in concert with AM gains, but the timing didn't line up.  Same story for various Fed comments throughout the day.  We're left with the impression that today was more about new positions being put on for 2024 and, in the more timely picture, range-finding ahead of this week's Treasury auctions and CPI data.

Market Movement Recap
09:44 AM

Flat to slightly stronger overnight in very quiet trading.  10yr down 2.8bps at 4.023.  MBS up 2 ticks.

11:58 AM

Additional gains.  10yr down 7.3bps at 3.978.  MBS up a quarter point.

04:58 PM

Giving up mid-day gains into the after hours close.  10yr now down only 2bps at 4.03.  MBS up only 1 tick (0.03).

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