Incidental Weakness or a New Trend?

The most interesting thing that happened in the bond market today involved trading levels breaking to just slightly worse levels than last week.  Looking back to the beginning of the month, this is starting to look like a trend toward progressively weaker levels. But is it? From a purely technical standpoint, that case could be made, but considering volume, the time of year, and the econ calendar, it’s just as easily chalked up to incidental movement in a narrow range.  In fact, all of August’s trading continues taking place well inside the range set by the post-jobs report rally.  

Econ Data / Events

Export prices mm (Jul)

0.1% vs 0.1% f’cast, prev 0.5%

Import prices mm (Jul)

0.4% vs 0.0% f’cast, prev -0.1%

NY Fed Manufacturing (Aug)

11.90 vs 0.0 f’cast, prev 5.50

Retail Sales (Jul)

0.5% vs 0.5% f’cast, prev 0.6%

Retail Sales (ex-autos) (Jul)

0.3% vs 0.3% f’cast, prev 0.8%

Retail Sales Control Group MoM (Jul)

0.5% vs 0.4% f’cast, prev 0.8%

Market Movement Recap

09:25 AM Moderately stronger overnight, but selling off since 8:20am CME open.  MBS unchanged and 10yr down less than half a bp at 4.313

10:57 AM Weakest levels.  MBS down an eighth and 10yr up 2bps at 4.337

02:57 PM Sideways just off weakest levels.  MBS down 3 ticks (.09) and 10yr up 2.2bps at 4.34