Slow Start to a Potentially Slow Week.
Bonds did a good enough job of holding their ground today thus leaving at least half of last week's gains intact. The past 2 trading days mean Treasuries are shying away from a more aggressive move toward lower yields and instead continue to favor a sideways consolidation. Things can always change, of course, but there's limited inspiration on the calendar in the coming days with Thursday's ECB announcement being the first thing that really jumps out. Equities may be interested in a corporate earnings calendar that continues ramping up, but stock/bond correlation has been hit and miss for months.
Fed MBS Buying 10am, 1130am, 1pm
Housing Starts 1.739m vs 1.613m f'cast
Building Permits 1.766m vs 1.75m f'cast
Bonds started out slightly stronger in Asia but lost ground a few hours into the European session. 10yr yields are now 'unchanged' on the day at 1.59%. 2.5 UMBS are effectively unchanged as well at 103-13 (103.41).
A bit of weakness earlier, followed by a bounce back to unchanged levels. 10yr yields are rising modestly again now, currently up 1.3 bps to 1.603. UMBS 2.5 coupons are still unchanged at 103-12 (103.375).
Treasuries remain modestly weaker, but have managed to hold a flat trajectory after a bit of weakness at 1pm. 10yr yields are up less than 1bp at 1.599%. 2.5 UMBS are up 1 tick (0.03) at 103-13 (103.41).