MBS RECAP: 10/25/2011


To say the EU Summit will dominate tomorrow’s market movers is a bit ironic considering the mere expectation of its occurrence (and potentially informative conclusion) has already been the biggest market mover in the room for several sessions now. Indeed where today’s bond-market-friendly gyrations originated and flourished. Will they merely bounce back tomorrow if the news out of the summit is not as friendly to bonds?

It’s hard to say, but certainly, volatility is a risk in either direction. No new ground was broken today with respect to the broader range of 2.109 and 2.231 in 10yr notes. In fact, the fact that we’re right on the edge of that frames today’s rally as something of a “calculated move.” Cold and logical…

Forget logic tomorrow though, it could be a wild ride. Then again, it could be anticlimactic. Durable goods hits in the AM as the only major US Econ data and of course the 5yr auction at 1pm remains a market-moving threat. The full run-down on data can be found here:

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