Uneventful Conclusion to Another Volatile Week

This morning began like many other recent mornings with economic data making a strong, logical case for bonds to move in a certain direction only for bonds to subsequently reverse course and do something else.  In today’s case, it was Retail Sales that pushed yields higher at first.  Perhaps it was also Retail Sales that allowed for a friendly correction as traders digested the report’s internal components (which weren’t as favorable as the headline).  Either way, bonds were able to get all the way back to positive territory by the afternoon.  That’s good in and of itself, but with 10yr yields still over 4.4%, the uptrend is still intact in the bigger picture.

Econ Data / Events

Retail Sales

0.4 vs 0.3 f’cast
last month revised to 0.8 from 0.4

NY Fed Manufacturing

31.2 vs -0.7 f’cast, -11.9 prev

Import Prices

0.3 vs -0.1 f’cast, -0.4 prev

Export Prices

0.8 vs -0.1 f’cast, -0.6 prev

Market Movement Recap

09:17 AM modestly stronger overnight and weaker after data.  MBS down 5 ticks (.16) and 10yr up 3.5bps at 4.474

09:28 AM weakest levels after trying to bounce briefly.  MBS down 6 ticks (.19) and 10yr up 3.9bps at 4.478

01:35 PM Bouncing back to best levels of the day now.  MBS up 1 tick and 10yr down 1.9bps at 4.42

03:40 PM Off the strongest levels, but not swooning in a major way.  MBS down 2 ticks (.06) and 10yr down half a bp at 4.434