While it was last Wednesday that provided the lion’s share of the excitement for the bond market last week, the following two sessions were at least somewhat active in terms of volume and volatility. But that’s still a long way off this week. Monday could have been considered one of those unofficial “3-day weekend” days, but Tuesday was even quieter. There was a small positive reaction to weaker home starts, but this was quickly eliminated by the supply of corporate bonds. Treasuries hit the CME less than 1 basis point at 3 p.m. the day after trading less than 3 basis points. MBS rose nearly an eighth point, but no higher than for most of Monday’s session.

Market Movement Review

8:27 am

Bonds were flat overnight despite strong corporate earnings, Hawk Fed speak and higher stock prices. The 10-year yields are 1.64% before the construction data, 1.2 basis points lower. UMBS 2.5 coupons are up 1 tick at 103-13 (103.41).

9:53 a.m.

Rapid reversal in negative territory due to corporate issuance and a late sell-off in European bond markets. 10 years equals half a bp per day and MBS has decreased by 2 ticks (0.06).

1:08 pm

Back in positive territory after the sell-off stalled shortly after the last update. Since then we have mostly kept sideways. Light volume. No major market drivers other than the corporate offering above.

3:18 pm

Crossed the finish line at 3pm (CME graduation) with MBS at the best level and 10 year returns still barely stronger that day. No notable market drivers this afternoon (and no move, of course).