Logical Weakness After Stronger Data

Forget “love.”  Today data hurts.  Durable Goods fired a warning shot at 8:30am.  Consumer Confidence and New Home Sales finished the job at 10am.  With that, a modestly stronger start gave way to a logical sell-off of moderate proportions.  By 11:30am, the losses had run their course and bonds drifted sideways for the rest of the session–perfectly inside the prevailing range. 

Econ Data / Events

Durable Goods

1.7 vs -1.0 f’cast, 1.1 prev

Durables, nondefense, excluding aircraft

0.7 vs 0.0 f’cast

New Home Sales 

763k vs 675k f’cast, 683k prev

Consumer Confidence

109.7 vs 104.0 f’cast, 102.5 prev

Market Movement Recap

09:24 AM Decent recovery after initial morning weakness.  10yr down half a bp at 3.717.  MBS up 1 tick (.03)

10:07 AM Weaker after New Home Sales data and consumer confidence.  10yr up 2.2bps at 3.745.  MBS down nearly an eighth.

02:48 PM Flat all afternoon after AM losses.  10yr up 4.5bps at 3.768.  MBS down just over an eighth.