Bond Market in Holiday Mode

Bond Market in Holiday Mode Holiday mode is impossible to clearly define when it comes to its impact on the bond market. We know it when we see it, and we saw it today. Bonds paid no attention to econ data no matter how much it may seem that the 10am Consumer Sentiment numbers had an impact. Movement was minimal and not visibly tied to any other motivation. And as we already discussed this morning, Japan's rate hike was a non-event. Holiday trading randomness will get worse over the next 2 weeks before it improves in early January. Econ Data / Events Consumer Sentiment (Dec) 52.9 vs 53.4 f'cast, 51.0 prev Existing home sales (Nov) 4.13M vs 4.2M f'cast, 4.1M prev Sentiment: 1y Inflation (Dec) 4.2% vs 4.1% f'cast, 4.5% prev Sentiment: 5y Inflation (Dec) 3.2% vs 3.2% f'cast, 3.4% prev U Mich conditions (Dec) 50.4 vs 50.7 f'cast, 51.1 prev Market Movement Recap 10:12 AM Sideways at modestly weaker levels. MBS down 2 ticks (.06) and 10yr up 2.1bps at 4.143 12:15 PM Decent recovery into 11am, but fading a bit now.  MBS down 3 ticks (.09) and 01yr up 2.7bps at 4.148