Bonds Find Some Solace in Warsh Despite a Bit More Selling

Bonds Find Some Solace in Warsh Despite a Bit More Selling The past 2 days have been rough for the bond market--nothing catastrophic, but "brisk" in terms of unexpected selling pressure.  To be fair, buying/selling pressure is never truly expected (otherwise, why wait to trade it?), and higher volatility was definitely a risk surrounding quarter-end and the data calendar. Today could have been worse, but the market found some solace in this morning's Warsh comments the ECB SINTRA conference. Warsh stuck to the "no forward guidance" script but managed to offer some in a roundabout way by saying inflation risks have come down and that he was open to different views on the Fed's balance sheet size. While not true forward guidance, it was a net-dovish message that the market reacted to. Shorter-term debt did best, but 10yr yields are ending up about 2bps lower than they were before Warsh. Econ Data / Events ADP jobs (Jun) 98K vs 113K f'cast, 122K prev ISM Manufacturing 53.3 vs 54.0 f'cast Market Movement Recap 08:43 AM Selling continues this morning. MBS down an eighth and 10yr up 2.7bps at 4.49. 09:51 AM Off the weakest levels. MBS unchanged and 10yr nearly unchanged at 4.467 01:53 PM MBS up 2 ticks (.06) and 10yr down 0.2bps at 4.463 03:23 PM MBS down 2 ticks (.06) and 10yr up 1.3bps at 4.479