MBS RECAP: Bonds Resilient Streak Under Threat

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Posted To: MBS Commentary

For the most part, today was marked by the same sort of resilience seen on several recent occasions where bond yields have either held steady or fallen despite decent-to-strong economic data. In today's case, it was a fairly healthy (depending whom you ask) improvement in durable goods (cap-ex +0.8 vs +0.1 forecast). The caveat is that was January data (government shutdown month), and thus taken with a grain of salt. Producer prices were weaker than expected, and because that was a February report, may have been worth some bond market resilience in the morning. Either way, bonds were weaker to start the day, but didn't weaken further after the early data. Additional resilience came into play after the 1pm 30yr bond auction. The auction was weaker than expected, but bonds didn't…(read more)

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