MBS Live Morning: Just When You Thought it Wouldn't Get Too Much Worse

Thursday may have seen some bond market weakness, but it was the kind we could tolerate considering yields didn't make new highs on the week.  In that light, Thursday could technically have contributed to a broader consolidation process.  Those hopes remained alive an hour into Friday's domestic session with yields actually a bit lower day-over-day.  Since then, a vicious snowball of selling pressure has obliterated this week's consolidation potential.  Pundits will be trying to explain this one for a while.

Could it be some "

Could it be inflation implications?  If so, we'd expect to see TIPS breakevens make a move at the same time, but the only notable move was 2 hours later.

Moreover, if inflation implications were to blame, we'd expect that to be reflected in oil prices surging simultaneously with bond yields.  They didn't:

So what's up with the big sell-off then?  

That's the whole point: there is no immediately obvious and undisputed scapegoat.