MBS RECAP: Bond Markets Flat-Line After Overnight Weakness

Depending on where you want to draw the line between the overnight and domestic sessions, nothing really happened today.  Bond markets were basically done doing much of anything by 9:15am, and even that early morning movement was primarily driven by late-day trading in Europe. 

It was as if yesterday's FOMC Announcement was the last major event that market participants were waiting around for and the overnight session simply gave Asia and Europe a chance to respond.  That's the most conventional way to view today's movement, anyway.

The counterculture frame of reference (and my personal favorite) is that European markets were already turning by Tuesday, but logically would be waiting to see what the FOMC Announcement had to say, if anything.  It ended up saying nothing, and thus got out of the way for the Eurozone-led trading to continue pushing the global "risk-on" rally in the same direction.  This jives quite well with domestic bond markets being done moving by morning (to quantify that, 10yr yields didn't move more than 1.5bps in either direction from 9:15am.  That's nothing).