When we reference "European bond markets," we're talking about the undisputed benchmark for the Eurozone: German Bunds. It's important to keep in mind that Germany is the political and economic center of the EU, and by an staggeringly wide margin.
Germany Bund yields hit another new all-time low today. US Treasuries once-again followed the move and were once-again reluctant to move forcefully through resistance levels around 2.44. It was only after a newswire went viral about a Ukrainian fighter jet being shot down that yields had enough momentum to get into 2.43's. They're just now back to 2.44.
It could be worse for Treasuries though... They could be MBS! The mortgage market wants as little of this geopolitical risk business as possible and it shows in the even more tepid improvements. Fannie 3.5s are up 5 ticks on the day while Treasury prices are up 10 ticks.
Jobless Claims data did almost nothing to push bond markets weaker. Instead, it was ECB President Draghi's press conference that kept bonds in the green, not to mention the overall rally momentum coming out of Europe. How long can 10yr US Treasuries hold out before pushing down to 2.40? And will we see another series of defiant bounces there as we have in the 2.44-2.47 neighborhood? A) longer than we would have thought and B) probably.
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