Better Balance, Finally

In the context of the first 3 days of the week, bonds pulled off a miracle today.  Most of the yield curve managed to remain in positive territory despite both of this morning’s key economic reports coming in stronger than expected.  Markets were definitely willing to trade that data as both reports garnered a pop in yields and volumes.  Perhaps it was a saving grace that neither report was unequivocally terrible for bonds.  Both had some “yeah buts” that helped balance the response.  What’s impressive is that bonds were finally willing to have a balanced response as opposed to selling first and asking questions later.  All this having been said, the jury is out as to whether this means anything or was simply the way today’s ball bounced. 

Econ Data / Events

Jobless Claims

227k vs 242k f’cast, 242k prev

Continued Claims

1897k vs 1880k f’cast, 1869k prev

S&P Services PMI

55.3 vs 55.0 f’cast, 55.2 prev

S&P Manuf. PMI

47.8 vs 47.5 f’cast, 47.3 prev

Market Movement Recap

10:03 AM moderately stronger overnight, but weaker after econ data.  MBS still up 1 tick (.03) and 10yr still down 1.5bps at 4.224

11:57 AM Choppy, but broadly sideways and near stronger levels.  MBS up 5 ticks (.16) and 10yr down 3.8bps at 4.201

01:42 PM A bit closer to the day’s best levels.  MBS up 7 ticks (.22) and 10yr down 4.9bps at 4.19

04:15 PM Off the best levels in the after hours session with MBS up only 3 ticks (.09) and 10yr down only 3bps at 4.208