The relevance of economic data increased this morning with the release of Q4 GDP and Jobless Claims. Neither were good for rates although neither were especially bad. Right after the data, the overnight rally gave way to moderate selling pressure and, ultimately, a return to unchanged levels for MBS in the 11am hour. After that, volatility was minimal despite lingering uncertainty on the tariff implementation that was originally slated for February 1st.
Slightly weaker after data but still in positive territory. MBS up 2 ticks (.06) and 10yr down 2.7bps at 4.513
01:27 PM
Steady weakness after data, but flat since 11am. MBS unchanged and 10yr down 1.8bps at 4.522
04:34 PM
Some volatility surrounding fabricated headlines on Trump tariffs. MBS unchanged and 10yr down 1.7bps at 4.523
Lock / Float Considerations
Bonds remained surprisingly calm as stocks unwound the initial explosion of DeepSeek drama. This is refreshing resilience, all things considered. It creates some room for risk takers to take risks even though those risks are only likely to pay off in a meaningful way if economic data comes in soft. Risk-averse clients are still waiting to see a confirmed shift in data and the rate trend.
