Treasuries experienced significant volatility overnight, rising abruptly to the highest yields since last Thursday as Asian markets opened, only to fall to 2-Month lows early in the domestic session. That made for a much wider than normal range (2.79 to 2.706). The leading suspect for the bond market positivity continues to be the emerging market currency meltdown, led by the Lira. Correlation finally became more compelling today (until today, the red line hadn't lined up so well with the others):
Bond markets continue to hover near their best levels of the day. Notably, 10yr yields touched their lows from last Friday (2.706) but failed to break any lower. MBS, however, made new highs as they continue trying to play catch-up to Treasuries, which have received more benefit from the flight-to-safety rally initially.
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