Bonds held their ground on Friday, but required some help from weaker economic data to do so. Compared to the past 2 sessions, volatility was much lower and losses may not have been too severe, even without the data. Taken together, the past 3 days illustrate just how desperate the market is for actionable econ data. The incoming week is once again sparse in that regard. It will also be punctuated by a rare mid-week holiday on Tuesday. One side effect of that holiday is that it pushes the 3yr Treasury auction forward to Monday--something that may have added slightly to the early selling in bonds today.
Calm overnight session and a flat start. MBS up 1 tick (.03) and 10yr up 0.3bps at 4.088.
01:13 PM
Flat at strongest levels. MBS up 1 tick (.03) and 10yr down 1.3bps at 4.072
03:37 PM
Still little changed. MBS are perfectly flat and 10yr yields are less than half a bp higher at 4.089
Lock / Float Considerations
Heading into the weekend, bonds are confirming that they've found their footing following the mid-week sell-off. They're also confirming that they'll need fresh inspiration if yields are to fall in a meaningful way.
