Hopeful Markets and Big Corporate Deal Pushes Yields Higher
Stocks and bond yields moved higher in unison today while oil prices fell--a pattern that generally and broadly conveys "risk-on" trading sentiment surrounding Ukraine. Some would say this had to do with overnight headlines regarding openness to diplomatic solutions on both sides. Others would say "yeah, but Russia bombed a children's hospital a few hours later." Regardless of the "yeah buts," markets took the de-escalation ball and ran with it. Things got incrementally worse for Treasuries due to a big corporate bond deal that poached buy side demand throughout the day.
Fed MBS Buying 10am, 11:30am, 1pm
Bonds tanked again overnight, this time as a part of a risk-on move following comments from Russia saying their aim is not to overthrow Ukraine's government. 10yr up 5.4bps at 1.892 and MBS starting out down 6 ticks (.19).
Additional weakness in the past 15 minutes, especially for MBS. 10yr yields keep grinding gradually higher, now up 8+bps at 1.922. UMBS 3.0 down 10 ticks (.31), and more than an eighth below AM highs.
Recovering a bit ahead of the 10yr auction. Yields now up only 6.4bps at 1.904. MBS down just over an eighth.
10yr at highs of day after moderately weaker auction, now up 9.9bps at 1.939%. MBS still not back to lows, but also weaker since auction, down 10 ticks (.31) at 100-07 (100.22).