Decent Day Helps Legitimize Friday's Gains
Any time we see a strong move on NFP Friday with a hint of "snowball buying," it's worth considering that momentum at the end of the week is getting a bit carried away. At the very least, in those scenarios, we wouldn't be surprised to see a bit of push back at the beginning of the following week. Today was that beginning, and while there was arguably a small amount of push-back in the overnight session, it was quickly erased, and with minimal volatility to boot. This helps legitimize the levels achieved last Friday--especially with Treasury auctions on deck and another high risk event in the form of the CPI data on Thursday.
- No significant econ data
Mostly holding Friday's gains with 10yr yields up less than 2 bps at 3.578 and MBS down only 1 tick (0.03)
Additional gains heading into the 11am hour with some help from a NY Fed survey release showing lower inflation and spending expectations. 10yr down 2.2 bps at 3.538 and MBS up 2 ticks (.06).
Very flat since late AM gains. MBS up an eighth and 10yr down 3.2bps at 3.528.
Yields unable to break much below 3.51%, but not looking panicked. Currently still down 3bps at 3.53%. MBS down 2 ticks (.06) as indicated, but illiquidity accounts for at least an eighth of a point of the apparent weakness.