MBS RECAP: Another Big Bad Day for Bond Markets; Don't be Surprised

On an intraday basis, trading levels in Treasuries and MBS hit their weakest levels of the year today.  The biggest moves of the day happened  at 8:20am, 9:30am, and heading into 11am.  Respectively, that's the CME Treasury open, NYSE open, and European bond close.  This leads us to the conclusion that traders are trading "tradeflows" and liquidity. 

In other words, everyone has somewhere they want to go in terms of their trading positions.  They don't care as much about the news headlines or economic data.  They're like salmon swimming upstream, waiting for those good opportunities to swim up the more technical stretches of water.  If the water level is too low, they can either wait or struggle.

But the aforementioned times of day are like scheduled rain showers.  And much like a spring rain shower provides salmon a precious few extra inches of swimming room, so too do these temporal hubs of market liquidity serve as cues for traders to make their move upstream.

As far as the instinctive drive to "go upstream."  That's been covered.