No Free Lunches For Bond Market Bounce Back
After a sell-off like Friday's, it's a fair hope to fire up the screens to at least some measure of positivity on bond markets, even if it's only short-lived. Indeed, it's uncommon to see 5 days of increasing losses into a major event without the morning after providing some reprieve.
Yes here we are. Disturbingly 10yr yields not only traded marginally higher overnight, but thus far, have failed to break below Friday's post-NFP lows at 2.035. They're currently just slightly better than unchanged at 2.0453. MBS are also essentially unchanged, just half a tick over Friday's "post-roll" close at 102-05+. Equities futures are on the rise after hitting overnight lows at the same time as Treasury yields, but are still a point from breaking even vs Friday's 4pm levels.
There was little by way of market-moving considerations in the overnight session, at least if the relatively flat trading is any indication. There's a similar absence of relevant considerations for the rest of the domestic session, leaving tradeflows and technicals in charge, and leaving us to observe markets "trade it out" post-NFP.