Market watchers are at risk of major desensitization when it comes to "rates continuing higher." For essentially all of 2022 apart from the onset of the Ukraine war, rates have moved one direction. Not only that, but the pace has been relatively unprecedented unless we compare it to some of the most horrific historical precedents. It seems that every time the market gives us a shred of hope that the outlook is moderating, the hope is quickly shredded and we're back to wondering how high rates will go before we see legitimate relief. Today ended up being just another day in that saga. We have various ways to justify it (covered in the AM commentary and opening alert), but none so compelling that we went into the weekend expecting to see another bond market rout waiting for us on Monday.
Fed MBS Buying 10am, 11:30am, 1pm
Much weaker overnight with some additional pressure early after the announcement of a big corporate bond from Amazon. 10yr bounced at overnight highs just over 2.78, now back down to 2.75%. MBS are down 3/8ths of a point.
Some incidental weakness after 11am and additional selling after the 1pm 3yr Treasury auction. 10yr at highs of day, up 8.2bps at 2.786. UMBS 4.0 coupon down just under half a point.
Decent bounce in MBS taking 4.0 coupons back up a bit. Still down 10 ticks (.31) on the day, but up more than an eighth of a point from the lows. 10yr remaining right line with the last update at 2.786.