Sell Now and Wait For Something to Convince You to Buy

Bonds began the week with another move to long-term yield highs.  There was a wave of selling in the overnight session led by Europe and another when domestic traders ramped up for the day.  Neither were unequivocally the product of some data or news headline although there were a few scapegoats that could be mistaken for motivation.  The problem with said scapegoats is that--while they likely contributed--they were not nearly meaningful enough to justify the movement in question.  Conclusion: this sort of selling is broader and more sentiment-driven.  Traders are repricing "higher for longer" odds with the longer end of the yield curve.  Buyers are on strike until something convinces them to buy and that will be hard to do unless next week's data is weak.  

Market Movement Recap
09:55 AM

Sharply weaker overnight with more selling early and now a modest bounce.  10yr up 7.9bps at 4.515.  MBS down just over 3/8ths. 

01:16 PM

Sideways to slightly stronger into PM hours for MBS, now down 11 ticks (.34).  10yr sideways near highs, up 8.7bps at 4.523.

02:47 PM

Weakest levels of the day with 10s up 11bps at 4.546.  MBS are down 5/8ths but at least an eighth of that is attributable to illiquidity. 

04:08 PM

little-changed from the last update.  MBS down half a point.  10yr up just under 11bps at 4.544.