roughly unchanged overnight and mostly holding in early trading. MBS up 1 tick (.03) and 10yr up less than 1bp at 4.278
Strong 2yr auction but bonds were already gaining ground before that. 10yr now down 1.3bps at 4.259. MBS up 3 ticks (.09)
Bonds closed with MBS in line with their best levels, up an eighth of a point. 10yr yields fell just under 1bp to 4.264.
Focusing only production MBS coupons and longer-term Treasuries, the bond market is off to another slow, sideways start today with minimal change versus yesterday. With all of this morning's data now reported, we've seen no measurable impact on bonds. The overnight session was a different story but not due to econ data. Rather, bonds responded to Trump's firing of Fed Governor Cook (a process that is more complicated than it sounds) with a steepening of the yield curve (2yr yields moved lower versus 10yr yields). The steepening is consistent with the view that Cook's replacement would be that much more supportive of an aggressive rate cut outlook (2yr Treasuries have more in common with the Fed Funds Rate than 10yr Treasuries). This isn't a major shift in the bigger picture and it remains to be seen how Cook's firing will actually play out.