MBS Live Recap: Bonds Snooze Through Data and Infrastructure Bill

The day began with a morning of lackluster econ data being met with a yawn from the bond market.  A few hours later, the long-awaited infrastructure bill finally arrived to a similarly lukewarm reception.  As expected, it took a long time and was ultimately pared down significantly.  With markets having already done so much to prepare, there was nothing left to do but hit snooze again.  Finally, the 7yr Treasury auction wasn't nearly interesting enough for bonds to get out of bed.  Trading levels were basically flat for the entire day.

Econ Data / Events
  • Fed MBS Buying 10am, 1130am, 1pm

  • Jobless Claims 411k vs 380k f'cast, 418 prev

  • Durable Goods 2.3 vs 2.8 f'cast.
    (previous reading revised to -0.8 from -1.3)

  • Core Cap-Ex -0.1 vs 0.6 f'cast
    (previous reading revised to 2.7 prev from 2.2)

  • Final GDP Q1 6.4 vs 6.4 prev

Market Movement Recap
08:24 AM

A bond-friendly announcement from the Bank of England helped yields recover from modest losses in Asia.  10yr starting just barely stronger at 1.483.  MBS are unchanged.

12:04 PM

Still mostly sideways, but now slightly weaker.  No major cause and effect apart from the assumption of a slight concession heading into the 7yr Treasury auction.  10yr  is half a bp higher and UMBS 2.0 coupons are 1 tick (0.03) lower.

01:16 PM

No major reaction to 7yr auction or Infrastructure deal.  Same levels as the last update.

03:07 PM

Modest rally heading into the 2pm hour.  No overt justification for the move, but it wasn't big enough to demand one.  Also, it is mostly unwound now just after the 3pm close.  MBS are unchanged (2.0 coupons) to slightly stronger (2.5 coupons) while 10yr yields are still just barely weaker day-over-day.

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