Whether it’s a narrow 1.62-1.68% range on 10-year yields or 1.53-1.75%, bond watchers continue to wait for signs of a breakout. It certainly didn’t arrive today, and even if it did, the extremely low volume profile would speak against reading too much into it. Despite the largely sideways trend, charts under the microscope offer more examples of “higher lows” in bond yields than “lower highs”. As such, those who are truly on a fence (regarding the lock / float strategy) might err on the caution side until some evidence to the contrary is presented.

Econ data / events

  • Fed MBS purchase 10 a.m., 11:30 a.m., 1 p.m.

  • NY Fed Manufacturing 24.3 vs 23.9

  • Homebuilder Confidence 83 vs 83 f’cast, 83 prev

Market Movement Review

8:29 am

Bonds were slightly stronger in Asia but lost ground in Europe after a much stronger sell-off in European bond markets. 10-year yields start the domestic session less than half a basis point and MBS only fall 1 tick (0.03).

11:45 a.m.

No major market drivers in the game and no significant changes since the last update. EU bonds have flattened out and the worst seems to be over for this trading session. Treasuries and MBS are both still at previous levels and not far enough away from there to count.

3:27 pm

MBS at its weakest levels, but not for a reason and not very threatening. 2.5 UMBS vouchers are only down 2 ticks at 103-13 (103.41). 10 year yield still in the same range for the day, less than 1 basis point at 1.642.