- Modestly strong overnight session gave way to losses following Retail Sales data
- Bonds never went too red and then gradually found footing
- No major motivations for rally in terms of data or related markets
- But the general trend is lower in both stocks and bonds over the past few days
- 10's broke below 1.72 to close. Fannie 3.0s gained 5 ticks
It turned in to quite a nice afternoon for bond markets after a morning that wasn't too offensive in its own right. Treasuries were stronger overnight as markets traded "risk-off" (sell stocks/buy bonds) during Asia's trading hours. European hours brought a sideways consolidation of that move, but Treasuries managed to hold their ground even as European bond yields spiked.
Retail Sales came in much stronger than expected at 8:30am and bonds threw a nice head fake toward weaker territory before finally making their intentions known for the day. I say "intentions" because there really isn't any overt motivation for the rally other than to say bonds wanted to rally. Throughout the day, there are too many examples of stocks and oil moving in the opposite direction for external markets to be the consideration for bonds.
In technical terms, 10yr yields broke below an important floor of 1.72, but the "max resistance" lies ahead at 1.68.
102-25 : +0-05
1.7020 : -0.0560
|Pricing as of 5/13/16 5:48PMEST|