Absence Makes the Bonds Grow Stronger

Bonds improved at a moderate pace for the 2nd day in a row, thus marking the first sustained push back against the recent rate spike.  The gains are notable because they are not being driven by any big, new developments on the trade/tariff front. Instead, it is the absence of any such developments that is allowing the market to get back into a relatively calmer groove.  That said, we wouldn’t take the calm for granted.  Bonds have merely moved back to more nimble territory as we wait for more policy clarity.

Econ Data / Events

Import Prices

-0.1 vs 0.0 f’cast, 0.2 prev

Export Prices

0.0 vs 0.0 f’cast, 0.1 prev

NY Fed Manufacturing

-8.1 vs -14.5 f’cast, -20.0 prev

Market Movement Recap

10:16 AM Choppy, sideways, but slightly stronger overnight.  MBS up 3 ticks (.09) and 10yr down about half a bp at 4.367

01:04 PM Gains continue.  MBS up a quarter point and 10yr down 5.5bps at 4.32

03:13 PM Down an eighth from the best levels of the day, but still up 5 ticks (.16). 10yr down 4bps at 4.333, but up a few bps from best levels. 

04:34 PM Avoiding further weakness this afternoon.  MBS up 5 ticks (.16) and 10yr down 4.4bps at 4.33