UMBS opened down 11 quick basis points.

Bonds were weaker in the overnight session on a combination of anxiety over potential Treasury selling in Japan and stronger data in Europe.  Comments from an ECB official regarding a “one and done” rate cut in June also added to the pressure.

The 8:30am Durable Goods data hasn’t had any meaningful impact on the overnight weakness.  Yields were roughly 4bps higher to start and they’re now 4.7bps higher at 4.647.  Rather than chalk the slight increase up to the relatively unimportant Durables data, it makes more sense to view it as a simple continuation of the overnight trend.

Durable Goods = 2.6 vs 2.5 f’cast

last month revised from 1.3 to 0.7

Durables, excluding defense and aircraft = 0.2 vs 0.2 f’cast

last month revised from 0.7 to 0.4

New Home Sales rose 8.8% MOM in March to a seasonally adjusted annual rate of 693,000. This is up 8.3% on a year-over-year basis. The median new home price fell 2% on a YOY basis to $430,700. There is an 8.3 month supply of homes for sale.

Jamie Dimon is worried that stagflation might be returning to the US.

Bonds were weaker in the overnight session on a combination of anxiety over potential sales of US Treasuries in Japan and European economic data.  The domestic session brought actual selling of US Treasuries in the form of the 5yr Treasury auction, but the market already knew about that one.  The auction was reasonably well received and had no impact on trading levels.  Earlier in the morning, Durable Goods came out right in line with expectations and also had essentially no impact.  Overnight weakness was maintained throughout the day with most of the momentum being sideways near recent highs yields.

MBS closed the day down 15 bps at 99,46.