Jackson Hole Follow Through Helps Bonds Hold The Range
Bonds were at the top of their recent range last Friday, but buyers emerged after Powell's Jackson Hole Speech. The new week brought a gentle but obvious version of the same trade as both stocks and bonds improved at the NYSE open. Ultimately, that only served to reinforce a sideways range as markets wait for this week's data--especially Friday's big jobs report.
Fed MBS Buying 10am, 1130am, 1pm
Pending Home Sales -1.8 vs +0.4 f'cast, -2.0 prev
Bonds were slightly stronger in the overnight session despite modestly higher EU yields. 10yr down .3bps at 1.307 and 2.0 UMBS up 2 ticks (0.06) at 101-13 (101.41).
Modest additional gains after 10am (Fed TSY buying operation, month-end buyers, and technical triggers). 10yr yield now down 2bps at 1.29%. 2.0 UMBS up an eighth at 101-16 (101.5).
Ultra flat at slightly stronger levels with effectively zero movement in the PM hours. 10yr down 2.5bps at 1.285 and MBS still up an eighth.