Solid Conclusion to a Solid Week

Bonds benefited from a one-two punch of economic data and stock market weakness on Friday, eventually helping 10yr yields flirt with their lowest levels since December 18th (Feb 5th and 7th still technically a hair lower). MBS have outperformed over that time, briefly hitting December 13th levels during today’s best moments.  While the morning gains were clearly tied to the S&P PMI data, afternoon gains came courtesy of a flight to safety with investors dumping stocks aggressively. 

Econ Data / Events

S&P Services PMI

49.7 vs 53.0 f’cast, 52.9 prev

S&P Manufacturing PMI

51.6 vs 54.5 f’cast, 51.2 prev

Consumer Sentiment

64.7 vs 67.8 f’cast, 71.1 prev

Market Movement Recap

09:53 AM moderately stronger overnight with additional gains after the PMI data.  MBS up roughly a quarter point and 10yr down 4.5bps at 4.462

01:14 PM Stocks are tanking and pulling bond yields lower (not always the way it works, but that’s how it’s working today). MBS up 10 ticks (.31) and 10yr down 8.8bps at 4.418

04:36 PM MBS still 10 ticks higher (.31). 10yr just off strongest levels, down 7.4bps on the day at 4.432