The bond market continues mostly adhering to expectations for narrower trading ranges and less directional movement against the backdrop of a holiday-shortened week without any major market movers. But wait! What about the Fed Minutes? Wouldn't this classify as at least a POTENTIALLY major market mover? At times in the past, sure, but at present, not so much. We were comfortable asserting as much even before the Minutes came out and now that they're in the rearview, their insignificance is clear. The market has clearly shifted gears into holiday mode with light volume and liquidity greasing the skids for random volatility without any fundamental justification.
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- Existing Home Sales
- 3.79m vs 3.9m f'cast, 3.95m prev
- Existing Home Sales
Best levels of the day after initial weakness. MBS up an eighth and 10yr down 2.2bps at 4.402.
Some weakness ahead of Fed minutes. MBS back down to 'unchanged' (off just over an eighth from the highs). 10yr up 1.3bps on the day to 4.437 (new highs for the day).
No real reaction to Fed Minutes. 10yr roughly unchanged at 4.426. MBS up 3 ticks (0.09).
MBS getting squeezed a bit in a good way. 6.0 coupons up 7 ticks (.22) and 10yr yields down 1.4bps to 4.41.
MBS Market Alerts
