5 for 5 on Uneventful Trading Days; Next Week Should be Different

Heading into this week, if we had to guess, we would have expected things to look about how they looked.  Specifically, yields didn’t challenge the trading range and economic data wouldn’t have a huge impact on bonds.  Perhaps that would have been different if the data fell farther from forecasts, but it didn’t, so we can only guess.  Either way, we know the upcoming week contains bigger landmines and more of them.  So if we had to guess, we would expect a range breakout to happen for better or worse, or at least rapid swings between range boundaries (i.e. 3.42 and 3.62 in terms of 10yr yields).

Econ Data / Events

Monthly Core PCE

0.3 vs 0.3 f’cast, 0.2 prev

Annual Core PCE

4.4 vs 4.4 f’cast, 4.7 prev


0.2 vs 0.2 f’cast


-0.2 vs -0.1 f’cast

Consumer Sentiment

64.9 vs 64.6 f’cast, 64.6 prev

1yr inflation expectations

3.9 vs 4.0 prev

5yr inflation expectations

2.9 vs 3.0 prev

Market Movement Recap

09:04 AM moderately weaker overnight with losses occurring mostly in Asia.  Slightly stronger after data.  10yr still up 1.8bps at 3.522.  MBS down an eighth but illiquid.

11:18 AM Sideways grind in Treasuries, 10yr still at 3.522.  MBS down only 1 tick now (-0.03).

03:03 PM Traction in MBS throughout the mid-day hours.  5.0 coupons up an eighth.  10yr yields up only 1.4bps now at best levels of the domestic session (3.518).
Source: Mortgage News Daily