To reiterate a point made in the mid-day commentary, it's important to note that bond markets were weaker today WITHOUT the same sort of motivation recently seen/required from equities markets. In other words, most any recent rally has been accompanied by stock market weakness and vice versa for sell-offs. But today's selling didn't see an especially detectable amount of strength in stocks.
That's probably OK as it could just be how bond markets are managing their pre-NFP consolidation. The only reason to fear it would be if NFP offers no solace to bond markets. But if you have that fear, today was as good a day to lock as any, at least before the reprices, and there were quite a few.
Weakness kicked into higher gear in the afternoon and in many ways, was 'MBS-specific.' While Treasuries did more to ease into their weakness, MBS moved in fits and starts, with notable underperformance in the second half of the day.
There's clearly some concern that the great bond market correction of early 2014 is just that--a correction. But those who feel there's more correcting to do (lower in rate) are clearly still around. They won't likely admit defeat unless NFP is strong, with solid revisions.
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