After making multi week highs last Friday and severely testing those with a bearish long-term viewpoint the ultra long bond is down around 54 ticks today. The thirty years are down 32 ticks after holding under the 15420 resistance level a couple of different times in the last two weeks. Curve flatteners are taking a break and an extreme may have been traced out last week in the two year/ ten year spread. San Francisco Fed President Williams reiterated the plan for three hikes in 2018 and two to three for 2019. He also mentioned the recent yield curve isn’t signaling a recession. All this has thrown a little cold water on what was a buoyant long end. Concerns of a widening deficit eventually boosting supply are also back again. The surging stock market is adding to the bond selling as are the very solid economic reports released lately. Today’s December housing market index read beat expectations and hit the highest level since 1999. More housing news tomorrow with starts at 9 A. M. and the existing home sales report Wednesday. Philly Fed on Thursday with the usual jobless claims and then Durable goods, personal income, consumer sentiment and new home sales round out the week on Friday.
