Yields Bounce Back Nicely, Ending Lower For 2nd Straight Day

Back to back rally days are a rarity in March.  It happened one other time right at the beginning of the month and that required a frenzied Friday flight to safety amid the surge in geopolitical risk surrounding Ukraine.  The following Monday saw a massive spike in oil prices, inflation expectations, and the unofficial start of the worst month for rates we've seen in a along time.  The magnitude of that pain is the biggest inspiration for ground-holding attempts that have followed.  With rates hitting new multi-year highs on Monday, we had another chance to embark on a technical correction.  Headlines and oil prices happened to play ball and now here we are wondering if this is the bounce we've been waiting for.

Econ Data / Events

  • Fed MBS Buying 10am, 11:30am, 1pm

  • ADP Employment 455k vs 450k f'cast, 486k prev
    GDP Q4, Final 6.9 vs 7.1 f'cast, 7.0 prev

Market Movement Recap
08:24 AM

Modest rally and bounce overnight.  No change after ADP data.  10yr up 1bp and 4.0 UMBS down 1 tick (0.03).

10:37 AM

Solid buying at 10:17am with yields hitting new lows just 10:30am.  10yr down 2.4bps at 2.373.  MBS up 4-6 ticks (.125-.19).

01:47 PM

Gains stalling just after the noon hour and modest weakness since then.  10yr and MBS still in line with levels from the last update.