Nice Push Back Against Tuesday's Weakness. ECB On Deck

Abstract

Today's trading session managed to undo a fair amount of that weakness, essentially getting yields in line with last week's worst levels. For that, we would need a favorable reaction to Thursday's ECB announcement and in the slightly bigger picture, a friendly CPI report next week. Flat overnight during Asian market hours, then modestly stronger during European hours. 10yr down 3bps at 3.325% and MBS up an eighth. Mainly in the 9am hour for Treasuries, but trickling to stronger levels now. Additional gains in the PM hours, especially after EU bonds closed for the day. Corporate rate lock buybacks and Fed speakers are helping.