Moderate Weakness For Uneventful Reasons
Bonds lost some ground today with 10yr yields up roughly 2bps heading into the 3pm CME close and 2.0 MBS down an eighth of a point. Viewed holistically, the week was very calm and yields ended right in the middle of the range (1.22-1.30% in the narrowest terms). There were no sensational stories behind the move--just the sort of housekeeping trades we often see on the Fridays heading into auction cycle weeks. In other words, the weakness was incidental, and the skids were further greased by illiquid trading conditions.
Fed MBS Buying 10am, 1130am, 1pm
Very slightly stronger overnight amid low volume/volatility and linear move. Good candidate for 3rd weekend day for market participants until further notice.
Steady weakness all day with MBS now down an eighth of a point on the day. 10yr yields are at their highs, up 1.9bps at 1.262. No discrete cause and effect in terms of data or events. Traders are increasingly pulling up anchor ahead of next week and those trades are prompting other trades amid light liquidity.