Decent Gains, But Some Signs of Resistance

Decent Gains, But Some Signs of Resistance Bonds improved overnight at the start of European trading and made additional gains in concert with lower oil prices during the domestic session. Notably, the gains met resistance at 4.42%--a resistance level that's been on our radar since the last bounce a few weeks ago. Technical levels certainly don't predict the future, but they can provide a framework for measuring the pace of change in trading levels. If bonds are weaker in the morning, it would act as confirmation that the initial response to the Iran peace deal has played out. In addition, there's potential volatility surrounding the Fed announcement, almost exclusively reserved for feeling out any visible shifts from new Fed Chair Kevin Warsh. Econ Data / Events ADP Employment Change Weekly 25.5K vs -- f'cast, 29K prev Building Permits (May) 1.413M vs 1.42M f'cast, 1.423M prev Housing starts number mm (May) 1.177M vs 1.43M f'cast, 1.465M prev Import prices mm (May) 1.9% vs 1.0% f'cast, 1.9% prev Market Movement Recap 08:52 AM Stronger overnight as Europe trades the peace deal. MBS up 6 ticks (.19) and 10yr down 4bps at 4.438 11:55 AM Best levels. MBS up 6 ticks (.19) and 10yr down 5bps at 4.428 03:03 PM MBS up 10 ticks (.31) and 10yr down 5.3bps at 4.425