For Bonds, Spring Break Has Been Happening All Month

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If bond yields can manage to hold inside their recent range through the end of this week, they’ll have gone an entire month with the lowest volatility seen since last November (.144% currently vs .133% in nov).  And last November was the narrowest range since before the financial crisis.

We typically talk about narrow, sideways ranges as setting the stage for a bigger move higher or lower.  We’ve used terms like “storing energy” to convey the notion that these bigger moves become more likely the longer rates stay sideways.  But such breakouts can take months to develop.  That was the case after the last big adjustment in rates following the 2016 presidential election.  The 4 months that followed were cut from the same cloth as March 2018.

On a shorter time scale, we can consider this week’s calendar of events as further advocating a sideways grind.  First of all, there’s not a massive amount of top tier economic data.  Moreover the biggest data day is Thursday, which is a half-day ahead of a full closure for Good Friday.  Bottom line, bonds have already been acting like they’re on vacation, and this week’s calendar does nothing to suggest they come home just yet.

2018-3-26 open


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

99-24 : -0-05

Treasuries

10 YR

2.8446 : +0.0186

Pricing as of 3/26/18 9:09AMEST

Tomorrow’s Economic Calendar

Time Event Period Forecast Prior
Monday, Mar 26
13:00 2-Yr Note Auction (bl) 30
Tuesday, Mar 27
9:00 CaseShiller 20 yy (% ) Jan 6.2 6.3
10:00 Consumer confidence * Mar 131.0 130.8
13:00 5-Yr Note Auction (bl)* 35
Wednesday, Mar 28
7:00 Mortgage Market Index w/e 383.0
8:30 GDP Final (%) Q4 2.7 2.5
10:00 Pending Sales Index Feb 104.6
10:00 Pending Home Sales (%) Feb 2.1 -4.7
13:00 7-Yr Note Auction (bl)* 29
Thursday, Mar 29
8:30 Personal Income (%)* Feb 0.4 0.4
8:30 Consumer Spending (Consumption) (%) Feb 0.200 0.200
8:30 Core PCE (y/y) (%)* Feb 1.600 1.500
8:30 Jobless Claims (k) w/e 230 229
9:45 Chicago PMI * Mar 62.0 61.9
10:00 U Mich Sentiment Final (ip) Mar 102.0 102.0
Friday, Mar 30
0:00 Good Friday *



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