Rally or Resistance?

The bond market rallied on Thursday with 10yr yields dropping about 5bps to just under 3.40% after a smattering of bank drama and softer economic data in the morning.  That said, whereas yesterday saw an AM improvement followed by additional steady gains, today's AM improvement gave way to a bounce with a sideways to slightly weaker trend after that.  On the one hand, a rally is a rally.  On the other hand, we've been in the same old range for months and there's a high burden of proof for a friendly breakout.  

Econ Data / Events
    • Jobless Claims
      • 264k vs 245k f'cast, 242k prev
    • Core M/M Producer Prices
      • 0.2 vs 0.2 f'cast, -0.1 prev
    • Core Y/Y Producer Prices
      • 3.2 vs 3.3 f'cast, 3.4 prev
    • Headline Y/Y Producer Prices
      • 2.3 vs 2.5 f'cast, 2.7 prev
Market Movement Recap
09:57 AM

Modestly stronger overnight with additional gains after the AM data.  10yr down 7bps at 3.368.  MBS up 6 ticks (.19).

01:11 PM

No major impact from 30yr bond auction (decent results).  10yr down 5.7bps on the day at 3.382.  MBS up 5 ticks (.16).

02:56 PM

Some weakness in the 2pm hour.  MBS still up an eighth on the day, but down an eighth from the highs.  10yr yields still down 4.2bps at 3.397, but up nearly as much from the lows. 

04:33 PM

Selling pressure never increased.  MBS up 5 ticks (.16) and 10yr down 5.5bps at 3.384.

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