Bonds did well enough yesterday to suggest yields might not be interested in moving back to the higher end of their recent trading range.  Today’s early weakness quickly reintroduced that narrative.  A decent recovery in the middle of the trading day did little to defuse the broader trend risks.  By the 3pm close, 10yr yields were 2+ bps higher and MBS were 2 ticks weaker (-0.06).  This isn’t a massive sell-off by any means, but any weakness would have been enough to reinforce the trend.

Econ Data / Events

Market Movement Recap

08:36 AM

MBS opened roughly 1/8th lower and 10yr yields roughly 3.5bps higher after European econ data and stock strength led bond weakness overnight.

01:03 PM

Modest recovery after opening weaker.  10yr yields have dropped just over 1bp and MBS have picked up roughly 2 ticks (0.06).  No major market movers in play–just European selling sentiment meeting better buying demand among domestic traders.  10yr at 1.10% and UMBS 2.0 at 103-06 (103.19).

03:33 PM

Another very quiet trading day wrapping up–just at higher yields today vs yesterday.  “Modest” turned out to be the right word for the mid-day recovery, but “underwhelming” is just as good.  10yr is still more than 2bps higher and MBS are still a bit weaker vs yesterday.