Biggest Selling Spree in a Long Time, Here's Why

Absolutely massive selling in MBS today with 3.0 coupons losing more than a point at the time of this writing.  10yr yields jumped 18bps to 1.894.  While the trading levels are better than they were last week, they all but erase all of the ground covered so far this week.  Given that this ground was covered in response to the Ukraine invasion, and the fact that Russia certainly hasn't stopped invading Ukraine, we're well without our right to ask why all the gains have evaporated.  This is discussed in great detail in today's video.

Econ Data / Events

  • Fed MBS Buying 10am, 11:30am, 1pm

  • ADP Employment 475k vs 388k f'cast
    (last month revised up from -301k to 509k)

Market Movement Recap
08:38 AM

Bonds were sideways to slightly weaker overnight and continue to lose ground so far this morning.  "Slightly" in the current context is bigger than normal.  10yr up 5.6bps at 1.774 and UMBS 3.0 down a quarter point.

09:53 AM

selling accelerated at 9:30am NYSE open with 10yr now up 8bps at 1.796 and MBS down 14 ticks (.44).  Stocks are up roughly 1%.  General risk-on trading is apparent, but Fed speakers Evans and Bullard haven't helped. 

11:42 AM

More time, more weakness.  MBS down 3/4ths of a point at times.  10yr up almost 13bps.  Powell comments coincide with the weakness, but that's more of an issue for the front end of the curve.  BIG corporate issuance is weighing, and a general risk-on bounce in the broader market.