Whereas the bond market had obvious, individual motivations for all phases of the sharp sell-off over the previous two business days, today's rally was far more mysterious. To be sure, a 7bp rally in 10yr Treasuries doesn't need any substantive fundamental justification if it follows hard on the heels of an almost 30bp sell-off, but it's always nice to keep track of what matters. In this case, it may be seller exhaustion and 2024's technical ceiling matters more than fundamentals. We also noted correlation between geopolitical headlines and the sharpest leg of today's rally, but remain unsatisfied in the logic required to connect those dots. Satisfaction aside, we'll take the rally and hope to see validation in Wednesday's 10yr Treasury auction.
Modestly stronger overnight. Additional gains after 9:30am NYSE open. MBS up almost a quarter point. 10yr down 2.9bps at 4.131.
Solid gains into the PM hours and holding near best levels. MBS up 9 ticks (.28) and 10yr down almost 7bps at 4.092%
Holding best levels of the day with both MBS and Treasuries unchanged from the last update.
Heading out at the best levels with MBS up 10 ticks (.31) and 10yr yields down 7bps at 4.089.