Reasonably Resilient After AM Losses

In another straightforward trading session, bonds responded logically to a trio of upbeat economic reports in the morning slot.  None of the data was top tier in terms of relevance to bonds, but it was relevant enough to move the needle. Refreshingly though, 10yr yields treated 4.19% as a support level, which was the lowest possible pivot point after rising above 4.15%.  This doesn’t guarantee it will continue to hold, but it does suggest the bond market isn’t in a rush to sell off without justification. 

Econ Data / Events

Continued Claims (Sep)/13

1,926K vs 1930K f’cast, 1920K prev

Core CapEx (Aug)

0.6% vs -0.1% f’cast, 1.1% prev

Core PCE Prices QoQ FinalQ2

2.60% vs 2.5% f’cast, 3.5% prev

Durable goods (Aug)

2.9% vs -0.5% f’cast, -2.8% prev

GDPQ2

3.8% vs 3.3% f’cast, -0.5% prev

GDP deflatorQ2

2.1% vs 2% f’cast, 3.8% prev

GDP Final SalesQ2

7.5% vs 6.8% f’cast, -3.1% prev

Jobless Claims (Sep)/20

218K vs 235K f’cast, 231K prev

Market Movement Recap

08:41 AM Sideways to slightly weaker overnight with additional selling after data.  MBS down 6 ticks (.19) and 10yr up 3.7bps at 4.186

11:50 AM Near weaker levels.  MBS down 7 ticks (.22) and 10yr up 4.5bps at 4.194

01:08 PM No reaction to 7yr auction.  MBS down 5 ticks (.16) and 10yr up 2.9bps at 4.178

03:21 PM Still mostly sideways.  MBS down 5 ticks (.16) and 10yr up 2.1bps at 4.17