Modestly Weaker But Ultimately Uneventful

In terms of the realized volatility relative to potential volatility, this week turned out to be about as calm as we could have possibly imagined.  It is truly stunning that we will not be able to look back on daily bond market charts and pick out the most interesting Fed meeting in years.  As for Friday, it was void of data and serendipitously weaker for bonds.  One could argue that it’s a simple continuation of “selling the news” after “buying the rumor,” but we’d argue motivations don’t matter when we’re only counting a few bps of weakness in 10yr yields that leave us at levels that are still lower than all but a a week and a half of the past year and a half.

Econ Data / Events

Jobless Claims

219k vs 230k f’cast, 231k prev

Philly Fed Index

1.7 vs -1.0 f’cast -7.0 prev

Market Movement Recap

09:50 AM Slightly weaker overnight with additional selling early.  10yr up 3.4bps at 3.746 and MBS down 2 ticks (.06)

10:38 AM Additional losses in 10am hour.  MBS down 5 ticks (.16) and 10yr up 4.6bps at 3.757

12:01 PM Bouncing back on Waller comments.  MBS down only 2 ticks (.06) and 10yr up 2.5bps at 3.737

04:05 PM Slipping a bit again with MBS down 5 ticks (.16) and 10yr up 2.6bps at 3.738