More Long-Term Rate Highs, But No New Reasons

Bonds were in sell mode right from the start of the overnight session with 10yr yields moving to test the 1.95% ceiling in short order.  European markets briefly pushed back in the other direction, but only by a few bps.  By the time the domestic session started, weaker momentum was back in fashion and it lasted until roughly 10:30am.  10yr yields hit new multi-year highs of 1.97 and MBS new long term lows of 101-06 (101.19) in UMBS 3.0 coupons.  There were no new motivations for weakness today.  Bonds are just continuing the same repricing of reality that began in early January.

Econ Data / Events
Market Movement Recap
08:48 AM

Treasuries sold off in Asia, tried to bounce in Europe, and are losing ground again in the past several hours.  10yr up 3.5bps at 1.954.  MBS down almost a quarter point.

11:30 AM

Treasuries continued higher in yield through 10:30am, ultimately hitting 1.97% in 10s.  MBS have been holding firmer, still at the same levels as the last update (3.0 coupons down 7 ticks or .22 on the day).

01:25 PM

Modest late morning recovery, but weaker since 12:30pm.  10yr up 4bps at 1.96%.  UMBS 3.0 down 6 ticks (.19) at 101-11 (101.34).  No major reaction to 3yr auction.

03:19 PM

Weakest levels of the day for MBS, but still in the range for Treasuries.  3.0 coupons down just over a quarter point.  10yr yields up 3.6bps at 1.956.