The knot loosens a little. No Compulsions or Implications

The knot loosens a little. No Compulsions or Implications

Friday, Jan 20 2023, 5:03 PM

Bonds hit their best levels in months earlier this week but have retreated since then. At first, the retreat was gradual. By Friday, it was a little more visible, but still no aggressive goats. Earlier in the day, analysts pointed to the reopening of China after being locked down. Heavy selling in European bonds spilled over into Treasuries as ECB spokesmen struck a hawkish tone. Traders may also have adjusted positions earlier in the week with no Fed speakers and a round of Treasury supplies auctions. Despite the small loss, the trading conditions are in line with the last weekend, so the market is waiting for inspiration before going into a big game.

    • Current Home Sales
      • 4.02 vs 3.96 f’cast, 4.08 first

09:36 AM

Moderately weak overnight with some additional sales quickly. 10 year up 6bps at 3.458. MBS down by a quarter point.

11:31 AM

additional weakness. Trading reports from “real money” data as well as digital algos. 10 year up almost 10bps at 3.493. MBS down almost half a point.

02:33 PM

Live well into the PM hours. MBS down only a quarter point at 5.0 coupons. 10-year negative, up 8.3bps to 3.482.

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