Fed Week Uncertainty Makes For Logical Consolidation

Bonds rallied sharply just over a month ago following a downbeat jobs report and other data.  They then consolidated ahead of the early September data before rallying just a bit more.  The present week didn’t add much to the broader context and thus presented a good opportunity for another consolidation ahead of a week that’s sure to spark some volatility.  Friday’s only hope was Consumer Sentiment and it was not up to the task of raising any heart rates.  Bonds began the day in modestly stronger territory and are going out the door at almost the exact same levels.

Econ Data / Events

Consumer Sentiment

69.0 vs 68.0 f’cast, 67.9 prev

1yr inflation expectations 

2.7 vs 2.8 f’cast, 2.8 prev

Market Movement Recap

10:30 AM Slightly stronger overnight and giving back some gains in AM hours.  MBS still up 1 tick (.03) and 10yr down 1.1bps at 3.664.

12:55 PM Bouncing back into positive territory into the PM hours.  MBS up an eighth and 10yr down 2.6bps at 3.649

02:31 PM New highs for MBS, up 5 ticks (.16).  10yr down 2.9bps at 3.645