Bonds Improve on Late Day Risk Aversion; Thoughts on Liquidity

Bonds began the day in slightly weaker territory, but eventually turned green with help from a flight-to-safety in Europe.  A few hours later, US markets did the same thing, resulting in even better gains for Treasuries.  10s dropped under 3.40% and MBS gained more than an eighth of a point.  In other news, we're seeing more and more confusion (and misinformation) regarding the notion of illiquidity in the bond market. Today's video for MBS Live members discusses that in greater detail. 

Econ Data / Events
    • Jobless Claims
      • 191k vs 197k f'cast, 192k prev
Market Movement Recap
08:46 AM

modestly weaker in Europe. Additional selling on corporate issuance and First Republic pre-market rally.  10yr up 6bps at 3.513.  MBS down 3 ticks (0.09).

12:11 PM

Slow, steady gains in bonds with MBS outperforming 10yr Treasuries.  MBS up almost a quarter point.  10yr just hit 'unchanged' at 3.451.

01:38 PM

Off the best levels, but still stronger on the day.  MBS up an eighth.  10yr down .2bps at 3.449.

03:45 PM

Yields drop to best levels on flight-to-safety trading heading into the 3pm CME close.  Stocks fell in concert.  10s down 6+ bps at 3.387.  MBS up nearly a quarter point.

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