Bonds Hold Vast Majority of Last Week’s Gains

The most significant thing that happened as the market returned to the office from Thanksgiving weekend is that bonds were able to hold a vasty majority of last week’s gains.  That wasn’t immediately apparent if you were focusing on day-over-day losses, but consider that Friday afternoon saw a quick little rally that made for artificially strong closing levels. Any way you slice it, today’s yields remained roughly 20bps lower than those at the end of the week before last. This is as strong of a showing as we could have hoped for in the absence of any bond-friendly economic data.  The rest of the week is most likely to flow logically from the incoming data. As for today itself, it was mostly uneventful with “new month” and repositioning trades accounting for a mid day recovery from early weakness. 

Econ Data / Events

GDP

2.8 vs 2.8 f’cast

Jobless Claims

213k vs 216k f’cast

Continued Claims

1.907m vs 1.910m f’cast

Core PCE Q/Q 

2.1 vs 2.2 f’cast, 2.8 prev

Core PCE M/M

0.3 vs  0.3 f’cast, 0.3 prev

Core PCE Y/Y

2.8 vs 2.8 f’cast, 2.7 prev

Market Movement Recap

09:18 AM Giving back some of Friday’s ephemeral gains. MBS down 10 ticks (.31) and 10yr up 5bps at 4.221. 

12:16 PM decent gains heading into mid-day.  No obvious motivations apart from geopolitical tensions flaring again.  MBS down 5 ticks (.16) and 10yr up 1.1bps at 4.182 

03:52 PM Small friendly bump after Fed’s Waller’s comments.  MBS down an eighth and 10yr up 1.2bps at 4.183