Low Volume/Volatility For a Second Straight Day
Although it was last Wednesday that offered the lion's share of excitement for the bond market last week, the following 2 sessions were at least somewhat active in terms of volume and volatility. But that's far from the case so far this week. Monday could have been seen as one of those unofficial "3-day-weekend" type of days, but Tuesday was even calmer. There was a small positive reaction to weaker Housing Starts early, but it was quickly erased by corporate bond supply. Treasuries hit the 3pm CME close less than 1bp lower on the day, having traded less than a 3bp range. MBS were up almost an eighth of a point, but no higher than they were for most of Monday's session.
Fed MBS Buying 10am, 1130am, 1pm
Bonds flat overnight despite strong corporate earnings, hawkish fed-speak, and higher stock prices. 10yr yields are 1.2bps lower at 1.64% ahead of construction data. UMBS 2.5 coupons are up 1 tick at 103-13 (103.41).
Quick reversal into negative territory driven by corporate issuance and a late day sell-off in European bond markets. 10yr yields up half a bp on the day and MBS are down 2 ticks (0.06).
Back into positive territory after the sell-off stalled out shortly after the last update. We've been holding mostly sideways since then. Light volume. No major market movers apart from the aforementioned corporate supply.
Across the 3pm finish line (CME close) with MBS at their best levels and 10yr yields still just barely stronger on the day. No notable market movers this afternoon (and no movement, logically).