More Signs of Resilience Amid Month-End Buying Spree

It was a generally resilient day for the bond market after a bit of a scare in the morning.  European inflation data caused a sell-off in EU bonds that spilled over to Treasuries overnight.  Selling continued in the first few hours, but bonds began to recover after a slightly weaker Chicago PMI report.  A calm, sideways mid-day gave way to stronger buying as month-end trades crowded in before the 3pm CME closing bell.  Month-end buying aside, bonds were already showing a good amount of resilience by holding their ground in spite of the European influence.  

Econ Data / Events

Case Shiller Home Prices

-0.5 vs -0.5 f’cast/prev

FHFA Home Prices

-0.1 vs -0.1 prev

Chi PMI

43.6 vs 45.0 f’cast

Consumer Confidence

102.9 vs 108.5 f’cast, 106.0 prev

Market Movement Recap

08:39 AM Moderately weaker overnight with Europe leading the way.  Slight recovery early.  10yr up 2bps at 3.943.  MBS down 3 ticks (.09).

12:31 PM Nice bounce back after 10am.  10yr up only 1.2bps at 3.934.  MBS down only 1 tick (0.03).

03:23 PM Progressively stronger into the 3pm CME close with month-end buyer helping yields turn green.  10yr near unchanged on the day.  MBS down only 1 tick (0.03).