Bonds have done a good job over the past 2 weeks in negotiating hurdles of varying sizes. Last week’s inflation data was the biggest risk in recent times, but this week’s Fed minutes also raised some concerns. This morning’s example was courtesy of a much stronger PMI from Markit Services, but it didn’t compare to well-anchored range trading with longer-term returns. 10-year government bonds briefly hit their daily highs, but then settled into the same sideways to slightly stronger pattern seen yesterday afternoon.
Econ data / events
Fed MBS purchase 10 a.m., 11:30 a.m., 1 p.m.
Services 70.1 vs 64.5 f’cast
Making 61.5 vs 60.2 f’cast
Existing sales 5.85 million versus 6.09 million f’cast
Market Movement Review
sideways to a little stronger overnight. Uneventful volume and volatility. Modest gains in Europe with a bit of spillover helping US tens start 1 basis point lower at 1.618. UMBS 2.5 by 2 ticks (0.06) at 103-15 (103.47).
Markits Services PMI damaged bonds and brought 10-year yields back to daily highs (+ 0.6 basis points at 1.634). No major response to slightly weaker existing home sales as this is believed to be due to an inventory crisis.
The low volume / low volatility persists, with government bonds roughly unchanged and MBS only a shade stronger. Several Fed spokesmen on the circuit, but nothing special and new.
MBS Pricing Snapshot
The prices below are late. Please note the timestamp below. Real-time pricing is available through MBS Live.
103-16: + 0-03
|Prices from 05/21/21 4:08 p.m. CEST|
Today’s reprice notifications and updates
8:52 a.m. :: Sideways to a little stronger overnight