Downbeat Data Puts Downward Pressure on Rates

Although there was some cause for concern in the overnight trading session due to an OPEC-driven oil price spike, bonds fought back during the domestic session.  A resoundingly downbeat ISM Manufacturing report was the one and only big, obvious market mover (10am ET), posting recessionary figures at the headline level as well as the relevant sub-headings. Bonds quickly turned positive on the day after that and held calmly in a sideways range through the 3pm CME close. 

Econ Data / Events

ISM Manufacturing Index

46.3 vs 47.5 f’cast, 47.7 prev

ISM Prices

49.2 vs 51.3 prev

ISM New Orders

44.3 vs 47.0 prev

ISM Jobs

46.9 vs 49.1 prev

Market Movement Recap

09:12 AM Flat to slightly stronger after initial overnight weakness.  10yr still up 3bps at 3.5%.  MBS down just over an eighth of a point.

10:50 AM Much stronger after ISM data.  MBS up a quarter point.  10yr down 4.5bps at 3.425.

03:34 PM Sideways to slightly stronger all afternoon.  Up 6 ticks (.19) in 5.0 coupons and down 4.5bps at 3.426 in 10yr yields.