Key Technical Ceiling Holds Firm After Auction

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It was a pretty straightforward day for bond markets, which CONTINUE to operate in an exceptionally narrow, sideways range.  That’s been the case for close to 3 months now.  As such, with yields approaching the ceiling today, a breakout would have been big news, and we haven’t quite gotten to the headlines and events that constitute “big news.”

All that to say that bonds didn’t do anything too surprising by maintaining the range today.  Still, to see it happen in real time, it looked like our salvation depended upon the 30yr bond auction.  Heading into the auction 10yr yields were pushing the key technical ceilings near 2.42%.  After stronger auction results were released, bonds immediately found their footing, and managed to avoid returning to the higher levels.

On the other hand, bonds certainly weren’t eager to stampede back toward stronger levels–a fact that likely reflects the risky events on the calendar for tomorrow.  These include the morning’s Consumer Price Index and the afternoon’s Fed Announcement (specifically the economic projections released at the same time–2pm).  We’ll discuss these in greater detail in tomorrow’s Day Ahead.


MBS Pricing Snapshot

Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.

MBS

FNMA 3.5

102-16 : -0-03

Treasuries

10 YR

2.4029 : +0.0179

Pricing as of 12/12/17 4:58PMEST

Today’s Reprice Alerts and Updates

1:11PM  :  Reluctantly Improving After Reasonably Solid Auction

10:13AM  :  ALERT ISSUED: Negative Reprice Risk Increasing

8:53AM  :  Slightly Stronger PPI Allows Weaker Trend to Continue


MBS Live Chat Highlights

Matthew Graham  :  “I think what he meant to say was
“I can’t vote to add massive debt AGAIN (since I already did that once this month when I voted for the tax bill).””

Matthew Graham  :  “markets initially thought it was a reference to the tax bill. Most visible in the super flighty $/Yen trade”

Matthew Graham  :  “Seems like a head fake as he references the “spending bill””

Matthew Graham  :  “RAND PAUL SAYS CAN’T VOTE TO ADD TO `MASSIVE’ U.S. DEBT”

Sung Kim  :  “2.42 strong like bull huh”




Original Source