Bonds Blasted by Data and Stop-Gap
The stop-gap bill that averted the government shutdown was worth some instant selling in the bond market. It was not a given that this would be the reaction as past examples have gone both ways. We also can’t rule out random tradeflows associated with the changeover in the month/quarter. Selling intensified after the 10am ISM Manufacturing data with losses peaking just after the noon hour. 10yr yields hit a new long term high at 4.701 and MBS lost just over half a point.
Econ Data / Events
S&P Manuf. PMI
49.8 vs 48.9 f’cast, 47.9 prev
ISM Manuf. PMI
49.0 vs 47.8 f’cast, 47.6 prev
ISM Manuf. Prices
43.8 vs 48.6 f’cast, 48.4 prev
Market Movement Recap
09:24 AM weaker overnight. 10yr up 6.4bps at 4.643 and MBS down 10 ticks (.31).
10:26 AM Some additional weakness after PMI data. MBS down 11 ticks (.34). 10yr up 7.7bps at 4.656
04:15 PM 10yr up 11.4bps at 4.693, highest since 4.701 seen at 12:10pm. MBS down 19 ticks (.59) in 6.0 coupons.
