Congressional impasse and government shutdown

The impasse in Congress on the budget and debt ceiling talks has resulted in a shutdown of non-essential functions. But this helped rates yesterday, and stronger-than-expected economic data had little impact. (The news was that the Chicago PMI rose to 55.7, above the consensus of 53.5, and the highest level since May.) The U.S. 10-yr T-note yield hit its lowest level in nearly two months, thanks to the potential slowdown in the US economy from the shutdown. And looking at agency MBS prices, “organic” supply (current production of about $1 billion a day) is more than manageable as official buying from the Fed is still going strong.  All that said, the unemployment numbers coming out tomorrow might be the market mover this week.  I anticipate rates ticking back up a little bit.