Negative Trend Overall, But Bonds Bounced Back Today

January has marked a modest but noticeable shift in bond market momentum and Friday provides the latest evidence.  While we're content to view most of the recent weakness as a logical byproduct of decent economic data, there's certainly also an element of momentum that seems to be in play.  Friday's evidence comes in the form of selling pressure that began right at the 8:20am CME open.  The 10am econ data added to the selling, but it has since been shaken off.  We're left with modest weakness heading into the mid-day hours, but  yields are nonetheless at their highest levels in more than a month.

Econ Data / Events
    • Existing Home Sales
      • 3.78m vs 3.82m f'cast, 3.82m prev
    • Consumer Sentiment
      • 78.8 vs 70.0 f'cast, 69.7 prev
    • 1yr inflation expectations
      • down 0.2%
    • 5yr inflation expectations
      • down 0.1%
Market Movement Recap
10:10 AM

10yr yields are now up 5bps to the highs of the day at 4.192 and MBS are down 6 ticks (.19).

02:02 PM

Bouncing back into the PM hours.  10yr now up only 1.7bps at 4.159 and MBS down 3 ticks (0.09).

03:44 PM

Holding modest losses into the close.  10yr up less than 1bp at 4.149.  MBS down 2 ticks (.06).

04:52 PM

Squeaking into positive territory after hours.  10yr down 1.8bps at 4.124.  MBS showing a 1 tick (.03) loss, but it's actually more like a tick or two of an improvement after accounting for illiquidity.

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