Big Rally, But Not Big Enough to Demand an Interesting Explanation

Big Rally, But Not Big Enough to Demand an Interesting Explanation

It is unfortunate that, due to timing and a few other factors, a tweet by activist investor Bill Ackman is in the best position to receive credit for sparking a 15bp rally in 10yr Treasury yields.  Ackman simply said "we covered our bond short," which means he is a buyer instead of a seller.  It could also be taken to mean that he thinks yields have mostly topped out as 10s flirt with 5%.  That conclusion is one that much of the market is at least considering according to trading patterns over the past 3 days.  Ultimately, it will still take data to confirm, but restlessness is increasing.  As for the size of today's move, compared to Friday's close, it was roughly a 6bp rally by today's 3pm CME close--not the sort of surge that demands a big, obvious root cause.