Weaker Data Helps Bonds Hold Ground

Bonds remained in selling mode after Friday’s jobs report.  10yr yields rose in Asia and Europe before hitting the highest levels of the day just before the domestic session opened.  A glut of corporate bond issuance created additional headwinds, but they were no match for the weaker ISM Services data (50.3 vs 52.2).  That was good enough to get both Treasuries and MBS back to “unchanged” levels or slightly stronger. 

Econ Data / Events

ISM Non-Manufacturing

50.3 vs 52.2 f’cast, 51.9 prev

Factory Orders

0.4 vs 0.8 f’cast, 0.9 prev

S&P Global Services PMI

54.9 vs 55.1 f’cast, 53.6

Market Movement Recap

10:50 AM Weaker overnight but bouncing back after soft PMI data.  10yr down .3bps at 3.697. MBS up 1 tick (0.03)

12:31 PM Sideways to slightly weaker after ISM-driven rally.  10yr roughly unchanged at 3.70%.  MBS showing down a quarter point, but illiquidity is also worth about a quarter point at the moment.

03:25 PM Sideways to slightly stronger with MBS unchanged and 10yr yields down almost 1bp at 3.69.