More Long-Term Rate Highs, But No New Reasons
Bonds were in sell mode right from the start of the overnight session with 10yr yields moving to test the 1.95% ceiling in short order. European markets briefly pushed back in the other direction, but only by a few bps. By the time the domestic session started, weaker momentum was back in fashion and it lasted until roughly 10:30am. 10yr yields hit new multi-year highs of 1.97 and MBS new long term lows of 101-06 (101.19) in UMBS 3.0 coupons. There were no new motivations for weakness today. Bonds are just continuing the same repricing of reality that began in early January.
Fed MBS Buying 10am, 11:30am, 1pm
Treasuries sold off in Asia, tried to bounce in Europe, and are losing ground again in the past several hours. 10yr up 3.5bps at 1.954. MBS down almost a quarter point.
Treasuries continued higher in yield through 10:30am, ultimately hitting 1.97% in 10s. MBS have been holding firmer, still at the same levels as the last update (3.0 coupons down 7 ticks or .22 on the day).
Modest late morning recovery, but weaker since 12:30pm. 10yr up 4bps at 1.96%. UMBS 3.0 down 6 ticks (.19) at 101-11 (101.34). No major reaction to 3yr auction.
Weakest levels of the day for MBS, but still in the range for Treasuries. 3.0 coupons down just over a quarter point. 10yr yields up 3.6bps at 1.956.