Today's (and to be fair, this week's) only major econ data--ISM Services--was a mixed blessing for bonds this morning. The only headwind was the uptick in the inflation component to another post-pandemic high. The tailwinds involved all other components suggesting a mild economic deceleration. Traders ultimately gave more weight to the latter. Bonds were slightly weaker before the data, but ended the day closer to unchanged levels. MBS outperformed, presumably due to Treasuries facing down another week of heavy auction supply.
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- Trade Gap (Jun)
- -60.2B vs -61.6B f'cast, prev -71.5B
- S&P Global Composite PMI (Jul)
- 55.1 vs 54.6 f'cast, prev 52.9
- S&P Global Services PMI (Jul)
- 55.7 vs 55.2 f'cast, prev 52.9
- ISM Biz Activity (Jul)
- 52.6, prev 54.2
- ISM N-Mfg PMI (Jul)
- 50.1 vs 51.5 f'cast, prev 50.8
- ISM Services Employment (Jul)
- 46.4, prev 47.2
- ISM Services Prices (Jul)
- 69.9, prev 67.5
- Trade Gap (Jun)
Slightly weaker overnight and little-changed after ISM. 10yr up 2.2bps at 4.215. MBS down 2 ticks (.06)
No major reaction to 3yr auction. MBS down 1 tick (.03) and 10yr up 1.1bps at 4.204
Flat in the PM hours. MBS unchanged and 10yr up 1bp at 4.202
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