Random Bounce Back After Random Rally
Thu, Dec 28 2023, 5:18 PM
Bonds failed to do anything remarkable on Thursday as the random strength seen in Wednesday’s session was mostly erased. There wasn’t any obvious catalyst for moderate overnight losses, nor for the additional weakness leading up to the 7yr auction. Perhaps traders were apprehensive about the auction considering the weak results. At that point, we had our only logical correlation of the day (weak auction = higher yields), but nearly all of the volatility was contained inside yesterday’s trading range.
- Jobless Claims
- 218k vs 210k f’cast, 206k prev
- Wholesale Inventories
- -0.2 vs -0.2 f’cast, -0.4 prev
- Jobless Claims
08:35 AM
barely weaker overnight. Minimal reaction to data. 10yr up 2.2bps on the day at 3.811. MBS down just over an eighth.
12:36 PM
Broadly sideways ahead of 7yr auction. 10yr up 4bps at 3.829, but MBS still down just over an eighth.
03:04 PM
Weaker after 7yr auction, but stabilizing now. MBS down 7 ticks (.22). 10yr up 5.9bps at 3.848.
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