Slightly Stronger Because Not Every Day Can be Weaker

Bond yields have moved almost exclusively higher in May. At the very least, they’ve been in an incredibly linear uptrend.  Uptrends wouldn’t last very long if there wasn’t some push and pull (think 2 steps forward, 1 step back).  And that brings us to the best case for today’s gains: sellers are taking a breath.  Not every day can be a sell-off.  To be sure, the gains weren’t inspired by data or any new fiscal developments. We can attempt to force the mid-day pop to fit a fiscal narrative based on a comment on the Senate’s time frame for a vote, but we could just as easily say it was position-squaring ahead of a holiday weekend with traders leaving at lunch time today and not coming back until the middle of next week.

Econ Data / Events

Jobless Claims

227k vs 230k f’cast, 229k prev

Continued Claims

1903k vs 1890k f’cast, 1867k prev

S&P Services PMI

52.3 vs 50.8 f’cast, 50.8 prev

S&P Manufacturing PMI

52.3 vs 50.1 f’cast, 50.2 prev

Market Movement Recap

09:25 AM modestly weaker after spending bill passage, but back to unchanged in MBS now.  10yr down 1.3bps at 4.588

12:19 PM Nice rebound, perhaps on news that spending bill could take all summer.  MBS up 6 ticks (.19) and 10yr down 6bps at 4.542

04:27 PM Heading out near best levels with 10yr down 6.3bps at 4.538 and MBS up nearly a quarter point.