Tuesday was going poorly for bonds until a Trump Tweet threatening to withhold stimulus until after the election sent markets into a tailspin.  Hours later, Trump clarified that he’d gladly sign a bill for $1200 stimulus checks immediately as well as a $25bln bill for airlines and $135 bln for PPP.  With that, yesterday’s friendly reversal reversed and bond yields moved higher throughout the night.  The trend remains unfriendly until proven otherwise.

Econ Data / Events

Market Movement Recap

01:11 PM

Bonds were much weaker to start the day following a “risk-on” overnight session in response to Trump’s clarification on yesterday’s stimulus tweets (read more).  Treasuries and MBS gradually improved throughout the morning but now look to have leveled off after the 10yr Treasury auction (read more).  The Fed Minutes are next up at 2pm ET.

02:28 PM

Bonds continue losing ground after the Fed meeting minutes, though not for any clearly-defined reason based on the simultaneous stock market rally (i.e. if markets were reading “less accommodation” into the minutes, we’d likely be seeing stocks lose ground).  10yr up to highs of the day at .785 and 2.0 UMBS down just over an eighth at 103-09 (103.28).

04:35 PM

Modest after hours recovery in bonds keeps 10yr yields from closing above the .79% technical level (.784 currently).  MBS are off their afternoon lows as well with 2.0 coupons down an eighth on the day (they were down .19 an hour ago).  No major news behind the recovery, nor is it big enough to force us to find any.