Incidental Weakness. Bigger Considerations on The Horizon

Without any data or compelling market movers, bonds came into the day light on inspiration. Low volume/liquidity left the door open for any determined traders to have a bigger-than-normal influence on the market. That arguably happened between 9am and 10:30am ET with both stocks and bonds losing ground simultaneously. This coincided perfectly with an uptick in Fed rate hike expectations seen via near-term Fed Funds Futures.

Market Movement Recap
08:34 AM

Sideways to slightly stronger overnight. MBS up 1 tick (.03) and 10yr down half a bp at 4.697.

10:34 AM

MBS down an eighth and 10yr up 2.7bps at 4.728

01:47 PM

MBS down 5 ticks (.16) and 10yr up 3.9bps at 4.741