Solid Afternoon Bounce, But Context Matters
There's surely some great analogy to be made about perspective (filed under the "everything's relative" category). Bonds rallied quite nicely today with 10yr yields have their best domestic trading session since before the last Fed announcement. MBS didn't do quite as well, but we wouldn't expect them to given the shape of the yield curve (shorter duration bonds not doing as well as longer-duration bonds). But (wait for it...) everything's relative! 10yr yields at 1.64% are only good news compared to the past 2 days. If you missed those 2 days, then today isn't so much a "nice rally" as a confirmation that rates are at their highest levels since April.
Fed MBS Buying 10am, 1130am, 1pm
Sideways to slightly stronger overnight as the 1.70% level in 10yr yields proves supportive for now. Down 1.9bps to 1.677% currently and 2.5 UMBS are up nearly an eighth.
Gains have continued moderately. 10yr now down 3.8bps at 1.658 and 2.5 UMBS up 5 ticks (.19) at 102-05 (102.16). No major market movers in play, just short-covering after a heavy week of selling.
Quick losses after Powell says "ready to taper." MBS fell back to unchanged, but have stabilized up 3 ticks (.09). 10yr still down 3bps at 1.665.
Bonds cruising into the weekend like... Well, no time for memes. Bonds improved further this afternoon with 2.5 UMBS up nearly a quarter point and 10yr yields down 5.5bps at 1.641.