- Generally slow, but positive morning so far
- Durable Good headline near consensus, but weak internals helping bonds
- Multiple markets lining up in a "risk-off" direction (aka, buy bonds, sell stocks)
- 10yr yields down 2.3bps at 1.856 and Fannie 3.0s up 3 ticks at 102-00
Coming off 2 days of bigger volatility, bond markets had a calmer overnight session. Treasury yields rose only briefly during Asian market hours before beginning a gradual descent into the domestic session. Key contributors to the gains have been ongoing losses in oil and equities markets.
The morning's only relevant economic data was Durable Goods at 830am. The headline was close to consensus (-2.8 vs -2.9 forecast), but the important CapEx component (excluding defense and aircraft spending) was down 1.8 percent versus forecasts calling for only a 0.1 percent decline.
On a more liquid trading day on a more liquid week, we would likely be seeing an even bigger reaction to a CapEx reading that
