Big Rally, But Not Big Enough to Demand an Interesting Explanation

It is unfortunate that, due to timing and a few other factors, a tweet by activist investor Bill Ackman is in the best position to receive credit for sparking a 15bp rally in 10yr Treasury yields.  Ackman simply said "we covered our bond short," which means he is a buyer instead of a seller.  It could also be taken to mean that he thinks yields have mostly topped out as 10s flirt with 5%.  That conclusion is one that much of the market is at least considering according to trading patterns over the past 3 days.  Ultimately, it will still take data to confirm, but restlessness is increasing.  As for the size of today's move, compared to Friday's close, it was roughly a 6bp rally by today's 3pm CME close--not the sort of surge that demands a big, obvious root cause.

Market Movement Recap
09:12 AM

Weaker overnight with 10s hitting 5.02 by 530am ET.  Pushing back now, but still up 5.3bps at 4.967%.  MBS down 3/8ths.

11:24 AM

MBS turn green, now up 2 ticks (.06) on the day.  10yr yield down 4.3bps at 4.871.

01:43 PM

Gains continue.  MBS up a quarter point.  10yr down 7.6bps at 4.838.

03:18 PM

Generally flat since the last update.  10yr down 6.6bps at 4.848.  MBS up 9 ticks (.28).

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