Bonds Continue Watching Geopolitical Sideshow
Bonds are in a bit of a lull in the bigger picture. Yields have pushed high enough at a fast enough pace to encounter some semblance of in-range support despite periodic jolts from things like the most recent jobs report and CPI data. To be fair, it's hard to know whether yields were interested in going much higher than 2.06% just yet. We didn't get to find out due to the Ukraine news cycle. Geopolitical headlines continue to drive most of the intraday volatility over the past 5 business days and today is no exception.
Fed MBS Buying 10am, 11:30am, 1pm
Jobless Claims........ 248k vs 219k f'cast, 225k prev
Philly Fed............... 16.0 vs 20.0 f'cast, 23.2 prev
Building Permits...... 1.899m vs 1.76m f'cast, 1.885m prev
Stronger overnight after headlines alleging shots fired in Ukraine. 10yr dropped to 1.96 but moved back up as the initial news was called into question. No major reaction to AM data, currently down 5bps at 1.993. 3.0 UMBS up almost a quarter point.
Additional gains into the 11am hour, largely following Ukraine headlines. Bouncing back somewhat since then. 10yr yield still down almost 6bps at 1.982 and 3.0 UMBS up more than a quarter point.
Stocks swooning but bonds not following. MBS have been very flat near the highs of the day (3.0 coupons up 3/8ths of a point). 10yr yields are down 7bps at 1.97.