Massive Reversal After Russia/Ukraine Headlines
Quite the round trip today as bond yields hit the weakest levels in more than 2 years only to reverse course late in the day to fully erase an entire week's worth of weakness--at least for Treasuries. The reversal was driven by headlines regarding a potentially imminent Russian invasion of Ukraine. 10yr Treasury yields fell more than 10bps and MBS rallied more than half a point in response.
Fed MBS Buying 10am, 11:30am, 1pm
Consumer Sentiment ......61.7 vs 67.5
1yr inflation change ...... 0.1
5yr inflation change ...... 0.0
Slightly stronger overnight with most of the gains arriving at the start of the European session. 10yr yield down 4bps to 2.003%. 3.0 UMBS up 10 ticks (.31) to 100-11 (100.34).
progressively weaker into the noon hour with a technical bounce at 2.06 and a quick rally following Russia/Ukraine headlines. 10yr down 7bps presently at 1.974 and 3.0 UMBS up anywhere between an eighth and three quarters of a point depending on liquidity.
Gains accelerated with 10yr now close to week's lowest levels (down 11.6 bps at 1.927). MBS are up more than half a point. No new motivations, just ongoing geopolitical momentum.