Big Intraday Weakness Against Backdrop of Bigger Picture Strength
MBS lost more than 3/8ths of a point between 1030am and 330pm today and 10yr yields rose roughly 8bps during the same time. But even after those losses, the day-over-day gains were roughly the same size (i.e. MBS 3/8ths stronger and 10yr yields more than 7bps lower). Credit the PMI data overnight in Europe for a strong start this morning and domestic PMI data at 9:45am for another injection of bond buying momentum. The bigger picture is actually brighter dur to today's movement (and data). Well, brighter for bonds, not the economy...
Jobless Claims 229k vs 227k f'cast, 231k prev
Moderately weaker overnight, with all of the gains happening right at the EU open in response to weaker econ data. 10yr down 6bps at 3.10 and MBS up nearly a quarter point.
Bonds bulls started running after the 9:45am PMI data which showed slower growth and a big deceleration in prices. 10yr down 12.7bps at 3.033 and 4.5 UMBS up 5/8ths of a point.
Off the best levels of the day and slipping slowly since 11am. 10yr still down 10bps at 3.06 and MBS still up more than 3/8ths.
Weaker momentum continues and has now erased more than half of today's gains. Bonds are still well into positive territory, but more than 3/8ths of a point below the highs in MBS. 10s are up more than 8bps from the lows, but still down 6+ bps at 3.093.