Is it Time to Worry About Bond Market Losses?

Ever since Fed day, it seems the bond market only really knows how to  move in one direction (and it’s not the direction that most of us prefer, even if it’s necessary to maintain order in the universe). The post-Fed correction is arguably necessary, but the question is whether it says anything about the future.  Simply put: no.  The next major move for rates has been and continues to be all about economic data.  This correction has been a mild, temporary diversion–even if it continues for another week at the same pace.

Econ Data / Events

New Home Sales

716k vs 700k f’cast, 751k prev

5yr Treasury auction

right in line with expectations 

Market Movement Recap

09:39 AM Moderately weaker overnight, mostly in Europe.  MBS down an eighth and 10yr up 3.7bps at 3.766

10:32 AM More weakness after early recovery.  MBS down 6 ticks (.19) and 10yr up 4.7bps at 3.776

01:21 PM Slightly weaker after 5yr auction.  10yr up 5.2bps at 3.781.  MBS down a quarter point

03:57 PM Fresh lows for MBS, down 9 ticks (.28) on the day.  10yr up 5.7bps at 3.788