Small Scale Volatility In The Bigger Picture
The adverse market fee continues to dominate lock/float consideration for those who haven't seen it return yet. For everyone else, the decision has most to do with Wednesday's Fed announcement which presents the biggest binary risk we've seen from a scheduled event in a while (hint: binary means it could be good or bad for rates/bonds).
20min of Fed 30yr UMBS Buying 10am, 1130am (M-F) and 1pm (T-Th)
Bonds were almost perfectly unchanged overnight despite stocks gaining roughly 1% fairly quickly. 10yr yields are just a hair under 'unchanged' and 2.0 UMBS are in a similar stance (not enough liquidity yet to pin them down... could be down 0.09, up 0.03, or somewhere in between).
MBS at lowest levels since before 9am, down 1-2 ticks (0.03 - 0.06) on the day and 2-3 ticks (0.06-0.09) from the highs. Trading is pretty uneventful and MBS are just feeling some burn from persistent supply and modest intraday weakness in the broader bond market.
MBS down to new lows fairly quickly (off .19) from morning highs. 10yr yields at weakest levels, up 1bp at .68%. No overt motivation for the move in terms of news/data. Post-3pm liquidity seems to be playing a role.