Uneventful Friday, Even if Slightly Weaker

Friday’s trading session was the most uneventful of the week.  It began with moderate losses in the overnight session in concert with stock market gains.  Some traders attributed this to improved odds of avoiding a government shutdown by tonight’s deadline.  The only scheduled economic data was the Consumer Sentiment report which has fallen by the wayside to some extent as the results are increasingly discounted as being clouded by political affiliations of respondents. Nonetheless, the uptick in inflation expectations was notable and worth a bit of extra weakness in bonds at the time.  Even so, bonds remains well within the range set by yesterday’s trading.  The result is an “inside day” in market jargon, which one could either read as “indecisive” or “boring.”  We’d lean toward the latter.

Econ Data / Events

Consumer Sentiment

57.9 vs 63.1 f’cast, 64.7 prev

1yr inflation expectations

up 0.6%

5yr inflation expectations

up 0.6%

Market Movement Recap

09:30 AM Moderately weaker overnight in concert with stock market gains.  MBS down 3 ticks (.09) and 10yr up 3.4bps at 4.303

10:03 AM Some weakness following uptick in consumer inflation expectations.  MBS down 5 ticks (.16) and 10yr up 4.8bps at 4.317

12:27 PM Calm and sideways.  10yr up 2.6bps at 4.296.   MBS down 2 ticks (.06)

03:20 PM Losing some ground in PM hours.  MBS down 5 ticks (.16) and 10yr up 4.3bps at 4.313

04:49 PM Just a hair weaker.  MBS down 6 ticks (.19) and 10yr up 4.8bps and 4.318.