MBS Live Recap: Best Closing Levels Since Late November

In some regards, bonds had their best day of the year today.  The outright gains weren't quite as big as Jan 5th or 9th, but closing yields were the lowest since Nov 29th!  Much of today's bond market positivity owes itself to the 3-day weekend.  

Specifically, it now looks like much of last week's Thu/Fri weakness was due to traders getting out of the market ahead of the 3-day weekend.  Of course that leaves traders to get back into the market today, which was clearly the case based on the 7bp gain in 10yr yields. 

UK Prime Minister Theresa May's speech was a focal point for overseas markets early this morning .  Bonds improved heading into the speech (on the expectation for austere Brexit info) and weakened afterward (May was less austere than expected).  Weakness continued through the European close whereupon domestic bond markets found their footing and made modest gains into the afternoon.