Could be Better. Could be Worse
Bonds ended last week on a strong note with yields challenging the lowest levels of the recently higher range. With no definitive breakout, we were forced to wait for the current week to see if the good times could keep rolling. They couldn't--at least not today. In that sense, the new week could have gotten off to a better start. On the other hand, losses are minimal and bonds are still much closer to last week's better levels. In that sense, things could certainly be worse. Either way, we're waiting for last week's highs or lows to be broken--something that has a decent enough chance of happening after Friday's jobs report, if not before.
Fed MBS Buying 10am, 1130am, 1pm
Initially stronger at the start of the overnight session, then progressively weaker into domestic hours. 10yr now near highs of the day, up 2.6bps at 1.491. 2.5 UMBS down 2 ticks (0.06).
After hitting the weakest levels of the day around 10am, bonds have rallied back to the best levels of the day presently. 10yr yields are up only 1.2bps at 1.477 and MBS are unchanged from the last update.
Slightly weaker now with 10yr yields up almost 2bps at 1.484 and MBS down an eighth of a point. Broader theme is decisively sideways for the day.