Rates Recover Nicely After Fed Minutes

Today was the only day of the holiday-shortened week with any meaningful economic data on the calendar.  It’s debatable whether we should pay much attention to the intraday volatility considering the narrowness of the range and the impending holiday weekend.  The only abundantly clear takeaway is that markets were somewhat defensive heading into the 2pm Fed Minutes and then rallied to match the day’s best levels afterwards. Incidentally, the day’s best levels were right in line with the best levels since early October.

Econ Data / Events

Durable Goods 

1.0 vs 0.4 f’cast, 0.3 prev

Core Durable Goods 

0.7 vs 0.0 f’cast, -0.8 prev
last month revised down from -0.4

Jobless Claims

240k vs 225k f’cast, 223k prev

Market Movement Recap

08:41 AM Sideways to slightly weaker overnight.  Brief blip of buying after higher Jobless Claims, but 10yr still up 1.5bps at 3.772 and MBS down 6 ticks (.19). 

09:39 AM Steady gains since the last update.  10yr yield down 3.4bps at 3.726.  MBS up a quarter point and trading with better liquidity now.

12:21 PM Off the best levels now.  10yr still down 1.9bps at 3.739 and MBS still up an eighth of a point.

01:55 PM Giving up more ground ahead of the Fed Minutes.  10yr down only 1bp on the day at 3.75 and MBS unchanged after being up as much as 3/8ths. 

02:05 PM Recovering sharply after rate-friendly Fed Minutes.  10yr down 4.3bps at 3.715.  MBS up almost a quarter point after just being unchanged before the Minutes. 

03:24 PM Gains maintained into the 3pm CME close.  MBS up 10 ticks (.31) and 10yr right in line with the previous update (3.711 currently).
Source: Mortgage News Daily