Weaker Today, But Still in Solid Territory Despite Fed Push-Back

Bonds lost a bit of ground overnight and then lost some more right at the start of domestic trading.  The selling was inspired by comments from St. Louis Fed President Bullard who upped his view of the Fed’s rate ceiling and reminded the market that more hikes were coming, even after last week’s strong CPI numbers.  It’s a view that’s shared by every other Fed speaker this week (several of them in the past 12 hours).  But despite all that, yields remain at lower levels than those seen last Thursday afternoon (CPI rally day).  

Econ Data / Events

Housing Starts

1.425m vs 1.410m f’cast, 1.488 prev

Building Permits

1.526m vs 1.512m f’cast, 1.564m prev

Jobless Claims

222k vs 225k f’cast, 226k prev

Philly Fed 

-19.4 vs -6.2 f’cast, -8.7 prev

Philly Fed Prices

35.3 vs 36.3 prev

Market Movement Recap

09:00 AM Modestly weaker overnight with additional losses after Bullard comments at 8am.  Econ data at 8:30am didn’t help, but didn’t really hurt eithers.  10yr up 9bps at 3.78.  MBS down roughly half a point.

12:10 PM Weakest levels at 10am.  Sideways to slightly higher since then.  MBS down 3/8ths of a point.  10yr up 7.4bps at 3.762.

01:58 PM Best levels of the day for MBS, now down just over a quarter of a point.  10yr is still mostly sideways, currently up 9bps at 3.78

04:05 PM Back at the best levels of the day with MBS down a quarter of a point.  10yr up 7.6bps at 3.766.  No major market movers or volatility since 11am.
Source: Mortgage News Daily