Roughly Unchanged After Gradual Weakness

Roughly Unchanged After Gradual Weakness Bonds ended the day roughly unchanged despite this morning's stronger start. With the S&P falling back to the lows of the day, we can't really blame asset allocation trading between stocks and bonds. It's easier to blame a mid-day surge in fuel prices (especially after 11am) which may have been related to headlines regarding U.S. missiles striking an oil tanker docked at Kharg Island. All told, it was still a victorious week with yields ending up slightly lower than last Friday. The week ahead is marked by limited data and the pre-FOMC blackout period. Bonds will remain tuned into oil price volatility and potentially to any big swings in stocks. Econ Data / Events Building Permits (Jun) 1.367M vs 1.40M f'cast, 1.41M prev Housing starts number mm (Jun) 1.427M vs 1.31M f'cast, 1.177M prev Import prices mm (Jun) 0.3% vs -0.7% f'cast, 1.9% prev Market Movement Recap 08:46 AM Modestly stronger start despite higher oil/gas. 10yr down 1.9bps at 4.536 and MBS up 1 tick (.03). 12:47 PM Near weakest levels. MBS unchanged and 10yr down 1bp at 4.546 04:12 PM At the weakest levels. MBS down 1 tick (.03) and 10yr down 0.4bps at 4.551