Bonds Uninterested in Huge ADP Miss; Another "Inside Day"
For the third day in a row now, bonds spent a decent amount of time trading in stronger and weaker territory. Today's version was mostly stronger, but not strong enough for yields or MBS prices to get to better levels than those seen yesterday. In other words, prices and yields remained inside yesterday's range (hence "inside day"). Interestingly enough, intraday strength was distinctly unrelated to the hugely weaker ADP Employment data. In fact, bonds weakened for more than an hour after ADP. The rally didn't start until the 9:30am NYSE open.
Fed MBS Buying 10am, 11:30am, 1pm
ADP Employment .... -301k vs 207k f'cast, 776k prev
Flat in Asia again with volume still limited by holidays. 2-way volatility in Europe resulting in modest gains by the domestic open. No real reaction to ADP. 10yr down 1.6bps and MBS up 2 ticks (.06).
Nice bounce back following the 9:30am NYSE open. Treasuries back in positive territory, with 10yr down 3.2bps at 1.763. MBS are up more than an eighth at 102-06 (102.19).
Solid gains into the PM hours but without a major challenge to yesterday's better levels. 10yr down almost 4bps at 1.757 and MBS still up roughly an eighth of a point.