Bonds Brace For Stormier Weather After This Week’s Smooth Sailing

Despite a few inconsequential ups and downs, bonds ultimately traded with forgettable, sideways momentum this week. Friday did nothing to change that–especially after mid-day gains courtesy of optimism surrounding over-the-weekend trade talks between the U.S. and the EU. The gains corresponded with the news headlines about the U.S./EU meeting and bonds held steadily sideways after that. The incoming week is completely different in terms of calendar-based volatility potential.  There are relevant events on every single day culminating with “peak relevance” in the form of Friday’s big jobs report. 

Econ Data / Events

Durable Goods

-9.3 vs -10.8 f’cast, 16.5 prev

Core Durable Goods

-0.7 vs +0.2 f’cast, 2.0 prev

Market Movement Recap

10:48 AM Moderately weaker overnight and sideways to slightly stronger in the first few hours.  MBS only down 1 tick (.03) and 10yr up 1.1bps at 4.409

01:31 PM Solid gains starting just after noon E.T. on US/EU trade talks set for Sunday. MBS now unchanged and 10yr down 1.4bps at 4.383

04:34 PM Mostly holding gains into the close.  MBS up 1 tick (.03) and 10yr down 1.1bps at 4.387