Econ Data Keeps Bonds in Check

Looking solely at the end of day trading levels in the bond market, we could conclude that we are once again deprived of any meaningful motivations for momentum.  That’s partially true in the sense that today’s events were not “top tier.”  Nonetheless, we can still make a case for some relevance.  After all, bonds were definitely stronger ahead of this morning’s data.  The initial weakness could be coincidental, but the 9:45am reaction to the PMI data was fairly clear in terms of volume and volatility.  That’s interesting considering it was mostly in line with forecasts.  Some analysts suggested the focus was on the “confidence” metric at a 22 month high in the services sector and that’s a fair take if we’re trying to justify the reaction.  In the bigger picture, we’re waiting on next Friday’s PCE data (more like waiting on Monday since the bond market is closed next Friday).

Econ Data / Events

Philly Fed Index

3.2 vs -2.3 f’cast, 5.2 prev

Philly Fed Prices

3.7 vs 16.6 prev

Jobless Claims

210k vs 215k f’cast, 212k prev

Continued Claims

1807k vs 1803k prev

S&P Services PMI

51.7 vs 52.0 f’cast, 52.3 prev

S&P Manufacturing PMI

52.5 vs 51.7 f’cast, 52.2 prev

Existing Home Sales

4.38m vs 3.94m f’cast, 4.0m prev

Market Movement Recap

08:41 AM After econ data, 10yr up to 4.247 (still down 3 bps on the day). MBS still up 5 ticks (.16) on the day.

09:58 AM MBS are now down 2 ticks (.06) on the day and 10yr yields are unchanged at 4.277.

01:40 PM Flat since 10am.  MBS unchanged and 10yr half a bp higher at 4.281

03:45 PM Still flat near unchanged levels.  MBS up 1 tick (.03) and 10yr unchanged at 4.277.