Bond markets began the overnight session in fine shape, but soon succumbed to a steamroller of equity market positivity in the European session. Right when Europe opened, it was off to the races for European equities markets with the typical amount of spillover into domestic stock futures. Oil was arguably a part of the move as well, especially considering various headlines suggesting OPEC is ready to begin possibly thinking about starting the early phases of the inception of a conversation about cutting oil supply. And yes, it's about that noncommittal.
Still, Oil and stocks surged and bond yields followed the market's broader move back in a more "risk-friendly" direction. 10yr yields found support at the ever-so-important 1.84% ceiling (to whatever extent individual trading levels can have a sort of magical importance). Yields bounced incessantly at those levels both before the FOMC Minutes and once more afterward for good measure.
We're left with a judgment call to make. Did we just witness bond markets finally putting their foot down in the face of the recent selling pressure? Or was this merely the logical technical level for a consolidation before more selling? Locking is the safer play just in case the latter comes to pass, but the former suggests we keep a candle or 2 burning. As an aside, MBS outperformed again, which is typical on Treasury sell-off days--especially when corporate bond issuance is higher (and it has been). Tomorrow will be very telling.
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