Bank Lifelines Lead Bond Market Reversal

Financial markets continue feeling out prospects for global banking contagion.  Yesterday was a more fearful day, so bonds rallied.  Today was a more hopeful day, so bonds sold off.  That simple.

Econ Data / Events
    • Housing Starts
      • 1.45m vs 1.31m f'cast, 1.32m prev
    • Building Permits
      • 1.524m vs 1.340m f'cast, 1.339m prev
    • Philly Fed Index
      • -23.2 vs -15.6 f'cast, -24.3 prev
    • Jobless Claims
      • 192k vs 205k f'cast, 212k prev
Market Movement Recap
08:52 AM

Mostly flat overnight with modest gains early and no reaction to data.  MBS up a few ticks.  10yr down 3.7bps at 3.425

10:25 AM

Some initial weakness after ECB press conference, but bouncing back now.  MBS up an eighth and 10yr down 7.5bps at 3.388%.

10:57 AM

Losing ground quickly on First Republic bailout headlines.  MBS down more than a quarter point from highs.  10yr quickly up 8-9bps at 3.458.

03:34 PM

Selling spree leveled off shortly into the PM hours.  Holding fairly flat with MBS down 3/8ths on the day and 10yr yields up 10.5bps at 3.57.