The summer weekend trading momentum is sadly a source of motivation for the bond markets – especially given the lack of actionable data on a week ending with the most actionable data. With that in mind, while we said “Friday take away” at the end of last week, we can now say “Monday there”. As for government bonds, today’s “give” is more than adequate to “give on Friday”. In other words, yields ended the day at lower levels than they were on the Friday morning before the sell-off (and actually lower than most of the previous week). MBS has kept pace with Treasury gains quite well and the 2.0 coupons are now at their best level in 2 weeks.

Summary of the market movement

8:42 am

Bonds have strengthened overnight, mainly in Europe due to the general risk-off trading. 10 years down by 2 bps to 1.504 and 2.0 UMBS up by 5 ticks (0.16) to 100-24 (100.75).

10:39 am

Extra profits for bonds. No news or events behind the move. Once again, it was the simple fact that the clock struck 9:30 am (NYSE Open) that brought a new mix of buyers / sellers – maybe a few more traders with it Purchase at the end of the month needs.

1:55 pm

Friendly Fed spokesmen keep levels unchanged near the highs for MBS and lows for government bond yields.

4:24 pm

UMBS 2.0 coupons and 10-year returns have eaten up on modest additional gains, but have largely been unchanged at noticeably stronger levels since 10 a.m.