Bond markets got nostalgic for summertime Mondays today. Despite it being the beginning of a Fed week and falling hard on the heels of a sharper move on Friday, MBS and Treasuries barely budged by the time the domestic session rolled around. Even in the overnight session, there was only a token movement into slightly better territory.
Trading seemed more like it was bouncing back from Friday’s weakness than responding to any organic motivation to rally. And there was actually at least one organic motivation to rally. New Home Sales came in at an annual pace of 468k versus a median forecast of 555k. The previous reading was also revised significantly lower (529k vs 552k). But the market’s response was a mere token extension of a rally that was already in progress. 10 minutes after the data, bonds simply locked into a sideways slide for the rest of the session.