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Bonds Blasted by Data and Stop-Gap

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. 

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