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Morning Weakness a Simple Factor of Positioning
Morning Weakness a Simple Factor of Positioning
It can be a bit tricky to understand the roll of various forms of positioning when it comes to otherwise inexplicable movement in the bond market. It's also a fairly vague term that can refer to several different things. These include month-end trading, new-month trading, position squaring and short covering, to name the usual suspects. The effects of position-driven trading are amplified by the low volume and light liquidity of a major holiday weekend, and all of the above are playing a role in this morning's weakness. In a nutshell, there was never any genuine strength after last Friday's opening bell. We actually specifically entertained the possibility of short-covering driving those gains. This morning, we're simply seeing those short-positions being re-entered.
Giving back some of Friday's ephemeral gains. MBS down 10 ticks (.31) and 10yr up 5bps at 4.221.
decent gains heading into mid-day. No obvious motivations apart from geopolitical tensions flaring again. MBS down 5 ticks (.16) and 10yr up 1.1bps at 4.182
Stronger Bonds, Before and After (And Regardless of) Economic Data
| Time | Event | Period | Actual | Forecast | Prior |
|---|---|---|---|---|---|
| Monday, Dec 02 | |||||
| 9:45AM | Nov S&P Global Manuf. PMI | Nov | 49.7 | 48.8 | 48.5 |
| 10:00AM | Nov ISM Mfg Prices Paid | Nov | 50.3 | 55.2 | 54.8 |
| 10:00AM | Nov ISM Manufacturing Employment | Nov | 48.1 | 44.4 | |
| 10:00AM | Nov ISM Manufacturing New Orders | Nov | 50.4 | 47.1 | |
| 10:00AM | Nov ISM Manufacturing PMI | Nov | 48.4 | 47.5 | 46.5 |
| 10:00AM | Oct Construction spending (%) | Oct | 0.4% | 0.2% | 0.1% |
| 11:30AM | 26-Week Bill Auction (bl) | 81 | |||
| 11:30AM | 6-Month Bill Auction | 4.305% | 4.340% | ||
| 11:30AM | 3-Month Bill Auction | 4.400% | 4.415% | ||
| 11:30AM | 26-Week Bill Auction (bl) | 72 | |||
| 3:15PM | Fed Waller Speech | ||||
| 4:30PM | Nov/27 Central Bank Balance Sheet | Nov/27 | $6.91T | $6.92T | |
| 4:30PM | Fed Williams Speech | ||||
| Tuesday, Dec 03 | |||||
| 5:30AM | Nov LMI Logistics Managers Index Current | Nov | 58.9 | ||
| 8:55AM | Nov/30 Redbook yy (%) | Nov/30 | 4.9% | ||
| 10:00AM | Oct JOLTs Job Quits | Oct | 3.071M | ||
| 10:00AM | Oct USA JOLTS Job Openings | Oct | 7.48M | 7.443M | |
| 10:10AM | Dec IBD economic optimism | Dec | 54.1 | 53.2 | |
| 11:30AM | 26-Week Bill Auction (bl) | 75 | |||
| 11:30AM | 42-Day Bill Auction (%) | 4.480% | |||
| 12:35PM | Fed Kugler Speech | ||||
| 3:45PM | Fed Golsbee Speech | ||||
| 4:30PM | Nov/29 API weekly crude stocks (ml) | Nov/29 | -5.935M | ||
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