MBS Live Morning: Friday Isn't Great So Far, But It Still Fits in Either Narrative

Bonds got off to a much weaker start on Friday as "new month, new quarter" tradeflows leave sellers firmly in control.  This began right out of the gate in Japan and continued in Europe as EZ inflation hit 7.5% y/y vs 6.6% forecasts.  While there hasn't been a big additional move since this morning's employment data, it definitely hasn't helped either.  

Still, it's the bigger picture that's most important.  As we discussed heading into today, we really need to see how the first few days of April shape up before getting a sense of whether this week's rally was a sign of stability at recent highs or a temporary buying opportunity driven by month/quarter-end trading.  It would be less uncertain were it not for the already large size of the broader sell-off or the fact that it's in big psychological territory with 10's breaking above 2.5% on Monday.

Today isn't great so far, but it still fits in either narrative: