Token Year-End Volatility

Token Year-End Volatility Wednesday's shortened session offered more excitement than the first two days of the week. There was a modicum of legitimate data-driven selling this morning in response to the jobless claims data. Bonds had trudged most of the way back toward unchanged levels by 1pm ET, but volatility picked up again at that point. While 2pm is the official early close, 1pm is the cut-off for many of the largest traders to close out their year-end positions. This makes for a big spike in volume at that time, and it can also result in a quick jolt to prices/yields.  As far as year-end jolts go, today's was pretty normal and should not be taken as a sign of any underlying predisposition in the market.  Econ Data / Events Continued Claims (Dec)/20 1,866K vs -- f'cast, 1923K prev Jobless Claims (Dec)/27 199K vs 220K f'cast, 214K prev Market Movement Recap 08:34 AM losing ground after claims data.  MBS down 3 ticks (.09) and 10yr up 2.1bps at 4.144 12:11 PM pushing back from weaker levels. MBS down only 1 tick (.03) and 10yr up 1.5bps at 4.138 01:09 PM Some quick year-end selling pressure. MBS down an eighth and 10yr up 3.4bps at 4.158