Jackson Hole Follow-Through or Something Else?

Last Friday’s Jackson Hole speech was the subject of a fair amount of speculation and and anticipation in advance.  Some thought it would be a total non-event.  Others thought it could offer important clues about September.  The truth was somewhere in between with Powell not offering any surprising new ideas, but with markets nonetheless finding a way to be surprised about it. Perhaps it was the complete lack of a conciliatory message?  Either way, follow through from Friday’s Jackson Hole reaction accounts for at least some of today’s weakness.  Beyond that, data will need to provide a motivation for yields to fall in a meaningful way.

Econ Data / Events

no major economic reports

Market Movement Recap

09:10 AM Sharply weaker overnight with 10s testing the recent ceiling at 3.13%.  Some traction since then (still up 6bps at 3.09%).  MBS down more than 3/8ths of a point.  No overt, discrete motivations.  Just a general dogpile on Friday’s trading with bonds finally feeling the effects that Friday’s stock sell-off helped them avoid.

01:18 PM Ceilings held up fairly well despite some early weakness.  MBS are outperforming now along with the short end of the yield curve.  4.5 coupons are down just under a quarter point after being down more than 3/8ths of a point earlier.

03:42 PM little-changed in MBS or Treasuries since the last update.  MBS still outperforming, down just over a quarter point on the day.  10yr yields up 8.8bps at 3.117. 
Source: Mortgage News Daily