First thing's first. "Boring" isn't necessarily bad when rates are staying fairly close to their lowest levels in a year. That said, could the past few days be any more boring relative to their potential?
Not by much...
If traders wanted to take nearly the entire month of June off and set a water-drinky bird to peck the "buy" button when 10yr yields hit 2.66 and the "sell" button at 2.57, with randomness in between, it would be very hard for us to tell. 10yr yields, once again, approached the upper reaches of that range this morning, hitting 2.659 before bouncing sharply back to more central levels.
MBS were less stressed-out, and didn't even break yesterday's lows while Treasuries pushed beyond their weakest levels. We can likely chalk this up to Treasury-specific tradeflows relating to options/futures expirations today.
Fortunately, the failure to break the range deprives the selling pressure of it's ability to generate a momentum move, thus allowing those tradeflows to find more balance. In other words, morning weakness pushed the lead domino until it leaned, but not enough to knock it over. We could get more concerned about falling dominoes if we see 10's break 2.66 this afternoon. So far, that's simply a bridge we'll cross if we come to it, and we've been walking in the opposite direction since 9am.
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