Uneventfully Weaker Regardless of Durable Goods Data

Bonds were weaker in the overnight session on a combination of anxiety over potential sales of US Treasuries in Japan and European economic data.  The domestic session brought actual selling of US Treasuries in the form of the 5yr Treasury auction, but the market already knew about that one.  The auction was reasonably well received and had no impact on trading levels.  Earlier in the morning, Durable Goods came out right in line with expectations and also had essentially no impact.  Overnight weakness was maintained throughout the day with most of the momentum being sideways near recent highs yields. 

Econ Data / Events
    • Durable Goods 
      • 2.6 vs 2.5 f'cast
      • last month revised from 1.3 to 0.7
    • Durables, excluding defense and aircraft
      • 0.2 vs 0.2 f'cast
      • last month revised from 0.7 to 0.4
Market Movement Recap
09:06 AM

Weaker overnight and little-changed after AM econ data.  10yr yield up 4.1bps at 4.644.  MBS down 6 ticks (.19).

10:51 AM

Weakest levels.  MBS down 7 ticks (.22) and 10yr up 5.6bps at 4.657

01:04 PM

Boring 5yr auction.  No major reaction.  MBS down 5 ticks (.16).  10yr up 4.8bps at 4.649.

03:55 PM

Roughly unchanged from the last update and mostly flat since the late AM hours.

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