Bonds got back to their weaker ways after a very brief, shallow correction last Friday. We had increasingly expected that "green day," and were under no illusions about it starting a new trend. If we strike Friday's trading from the record, today's weakness would only have constituted a moderate extension of the same old trend that's been intact for 12 days. It's really just about that simple.
If there's a complicating factor today, it was a big slate of corporate debt issuance, led by an unexpected deal from Verizon. If you're not sure why that should matter for mortgage rates or just need a refresher, you can get caught up with the primer HERE.
Bonds sold early and often, with a noticeable acceleration in the weakness following the European close and again during the end of the day when the Verizon deal was hitting the market. Our worse-case-scenario technical levels remained intact (intraday highs at 2.641% on 10yr yields, from back in December), but unfortunately, that's not so much significant as it was coincidental. Rates are ready to break higher or lower depending on what we hear from the Fed forecasts.
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