Getting Back to Normal, For a Few Days Anyway

After a decidedly abnormal 6 weeks beginning in early October, bonds began to calm down last week.  This offered some hope that the brisk volatility and selling pressure was subsiding.  With 10yr yields closing inside a 3bp range for 5 days in a row, the restoration of normality is basically confirmed.  Today’s data didn’t have a big impact, but we wouldn’t expect it to (based on the mixed signals).  Bonds continue waiting on early December data for the next big push in one direction or the other.  The upcoming week is always a bit of a wild card due to the holiday and month-end, but the fact remains that there are no truly top tier market movers.

Econ Data / Events

S&P Services PMI

57.0 vs 55.2 f’cast, 55.0 prev

Consumer Sentiment

71.8 vs 73.7 f’cast, 70.5 prev

1yr inflation expectations 

unchanged 

Market Movement Recap

11:29 AM stronger overnight and steadily weaker during domestic hours.  MBS unchanged and 10yr down 1.1bps at 4.409

01:39 PM Little changed from last update.  MBS up 2 ticks (.06) and 10yr down 0.9bps at 4.412

03:58 PM Super sideways, all day, but a bit stronger for MBS, now up an eighth of a point.  10yr down half a bp at 4.417.