Bonds Snap Back Into Holiday Mode
Wednesday's abrupt sell-off increasingly looks like the market's way of getting caught up after 2 days of holiday closures in London (when London is closed, cash Treasuries don't trade overnight during the European session). Things were a bit touch and go this morning as yields rose back toward unchanged levels and MBS flirted with negative territory, but the PM hours have seen a return of calm, thinly traded movement. It's a bonus that the movement happens to be in a friendly direction. 10yr yields hit the 3pm close down roughly 4bps. MBS were nearly an eighth of a point higher at the same time.
Fed MBS Buying 10am, 11:30am, 1pm
Jobless Claims 198k vs 208k f'cast, 206k prev
Chicago PMI 63.1 vs 62.0 f'cast, 61.8 prev
Modest strength in Asia partially offset by modest weakness after 5am. 10yr yields still down 2.2bps at 1.534. MBS up nearly an eighth.
choppy 2-way trading gave way to a bit of weakness heading into 10am hour. Treasuries and MBS both trying to bounce at their weakest levels of the day. 10yr still down roughly 2bps. MBS 1-3 ticks (0.03-0.09) weaker depending on when you look at the screen.
Bonds found footing heading into the PM hours and have been flat since then. 10yr down 3.5bps at 1.522. MBS up 2 ticks (0.06).