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It’s Not So Bad if You Forget The Past 3 Days

It’s Not So Bad if You Forget The Past 3 Days Bonds had a somewhat encouraging rally over the past 3 business days, but all that went out the window today.  Why?  No particular reason!  That’s the nature of a market consolidation that falls hard on the heels of a rapid move to levels not seen in 16 years.  As gloomy as it may sound, the best way to view today is as the more normal of the past 4 days with the previous 3 rally days requiring explanations that included profit taking, short covering, value buying, etc. (all things that aren’t immediately measurable, but that make decent sense based on logic and precedent).  Bottom line: last week’s Retail Sales and Fed speakers pushed yields to 5% and not much has happened since then.  More things will start happening tomorrow, and even more next week.  Econ Data / Events New Home Sales 759k vs 680k f’cast, 676k prev Market Movement Recap 09:26 AM Steadily weaker overnight with the most noticeable selling following the 8:20am CME open.  10yr up 7.6bps at 4.895.  MBS down a quarter point 01:30 PM Gradual weakness leading up to auction. Additional selling after.  10yr up 14bps at 4.959.  MBS down 5/8ths. 02:50 PM Flat at the weakest levels.  10yr up 13.6bps at 4.955.  MBS down 5/8ths.

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