Risk Aversion Returns. Bonds Like It

First Republic's weaker earnings set the tone in the overnight session as debt ceiling drama continued to raise questions in the background.  Combined with several other examples of lackluster earnings and the general uncertainty caused by ongoing rate hikes despite signs of economic cracks, the bond market had enough risk-aversion sentiment to fuel a rally.  That narrative remained fairly steady throughout the day with stocks--and especially bank stocks--correlating with the drop in bond yields.  10s hit the floor of the current range as of the 3pm close.  MBS struggled to sustain a quarter point gain.

Econ Data / Events
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Market Movement Recap
09:12 AM

Steady gains overnight with a bit more buying early and now some give-back.  MBS still up an eighth.  10yr down 5.5bps at 3.441.

11:17 AM

Additional gains into the 10am hours with 10yr yields bottoming out at 3.398 and bouncing a bit.  Still down 7.6bps on the day at 3.42.  MBS up 5 ticks (.16).

02:13 PM

More gains for bonds as bank stocks slide.  10yr down 11+bps at 3.385.  MBS up just over a quarter point.

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