4th Straight Day Inside Last Thursday's Range
Last Thursday was the best rally day we've seen in months and it took yields to their lowest levels since early March. Against that backdrop, it seems like a sort of victory to be able to remain inside Thursday's trading range for the past 4 days. Trading levels aside, the lack of volatility can be chalked up to an absence of significant market movers. The calendar picks up a bit tomorrow with the ECB announcement and Jobless Claims bright and early.
Fed MBS Buying 10am, 1130am, 1pm
Very flat during Asian hours with a small bump higher in yield at the start of EU trading hours. Bonds have been bouncing back since then and are now unchanged vs yesterday at 1.57% in 10yr yields and 103-17 (103.53) in UMBS 2.5 coupons. No notable market movers.
Some weakness after Bank of Canada's policy announcement and press conference--not normally something we care about, but bonds seem to care to some small extent, likely due to the T word (tapering). 10yr yields up 2bps at the worst moments, but now up only 1.4bps at 1.58%. 2.5 UMBS briefly turned red, but are back up 1 tick (+0.03).
Weakness began drying up just after the last update and we're back to unchanged in 10yr yields and +.125 in MBS. The gains were intact before the 20yr bond auction at 1pm, and we've been flat since then.
Modest buying at the 3pm CME close, but not enough to break today's range in Treasuries. MBS, on the other hand, have been grinding higher all afternoon and did, in fact, just hit their highest levels of the day, up 5 ticks (.16) at 103-23 (103.72).