While there was some relevant econ data today (ISM Manufacturing), it didn't have an obvious impact on the bond market. Nonetheless, volume was back at pre-holiday levels. Notably, Dec 11(day after Fed day) was the last day of 2025 that wasn't affected by progressively lighter participation. 10yr yields closed at 4.15% on that day--the same level as today. The winter holidays don't always work out this perfectly, but it couldn't have been any more perfect this year. From here, we can plug back into the incoming econ data and read more significance into any major responses.
Moderately stronger overnight and at best levels after ISM data. MBS up 2 ticks (.06) and 10yr down 2bps at 4.171
02:57 PM
Off the best levels, but still close. MBS up an eighth and 10yr down almost 3bps at 4.162
04:01 PM
Sideways at best levels. MBS up 5 ticks (.16) and 10yr down 3.6bps at 4.155
Lock / Float Considerations
We're now exiting holiday mode for bond markets. Yields ended Monday, Jan 5th right were they ended the last full-fledged day of 2025 (Dec 11, post-Fed day), as if to commend anyone who tuned out from the past 3 weeks of meaningless volatility. Whether or not we see meaningFUL volatility in the coming days will most likely depend on the econ data that comes out on Wednesday and Friday.
