MBS MID-DAY: Bond Markets at Best Levels on Tepid Data and Ukraine

There's always a risk of crediting uncommon news headlines with too much market movement.  That's certainly happening with Ukraine to some extent at the moment, but Ukraine headlines are also certainly contributing to bond market positivity. 

As for the stronger-than-expected economic data, it was actually fairly lackluster.  The morning's most important piece of data--ISM Manufacturing--was only moderately stronger, and with the exception of the previous report, it would be the weakest since June 2013.  It didn't motivate much movement at all.

Even before ISM came out at 10am, stocks and bond yields began moving lower together starting at 9:40am and have been in relative lock step for most of the session.  That's a common occurrence during these 'flight-to-safety' movements.  The other common side effect is that MBS underperform Treasuries, which is also the case today.  That said, both are at their best levels of the day heading into the afternoon.