Bond Bounce Continues Ahead of Jobs Report and Next Week’s CPI

Apart from a brief breakout in mid-June, rates have been range-bound for nearly 2 months as they watch the stand-off between inflation and global economic growth.  The most recent bounce occurred at the floor on Tuesday morning. Bonds have been selling since then, but not for any especially compelling reasons. Rates/yields have now moved high enough as to be open to suggestion from Friday’s jobs report and especially from next Wednesday’s CPI data.

Econ Data / Events

Jobless Claims – 235k vs 230k f’cast, 231k prev

Market Movement Recap

08:36 AM Sideways in Asia, weaker early in Europe, back to unchanged by domestic open, and now losing a bit more ground.  10yr up 2.6bps at 2.956 and MBS down 5 ticks (.16)

11:18 AM moderate additional weakness in Treasuries with yields now up 5.2bps at 2.985.  MBS are outperforming with 4.5 coupons down only 3 ticks (.09) on the day at 100-09 (100.28).

12:57 PM Linear selling pressure continues.  10yr up 8bps at 3.013 and 4.5 UMBS down almost a quarter point.  

03:59 PM Selling decidedly flattened out in the PM hours with both MBS and Treasuries little-changed from the previous update.  All movement has been methodical and linear (smacks of pre-NFP/CPI positioning).