MBS Live Recap: Less Volatile Version of Same Old Theme; NFP Tomorrow

I'm running out of ways to talk about trade-war-related headlines driving risk-on vs risk-off movement in stocks and bonds.  In case you've missed it, this simply refers to stock market losses heading into the end of last week in response to recent tariff announcements and the the corresponding trade war fear. 

As stocks approached early February's 'flash crash' lows, bonds increasingly soaked up some safe-haven demand from all the money fleeing the stock market.  From there, as stocks managed to bounce and avoid setting new 2018 lows, bonds have returned to March's dominant range with 2.80% acting as a floor for 10yr Treasury yields.

Today saw the same theme play out amid slightly lower volatility.  This could be due to tomorrow's NFP announcement, which often motivates a bit of a consolidation in markets due to the potential volatility that can follow.  Unfortunately, the low-volatility move in Treasuries took them 2.5bps higher in yield. 

MBS, once again, managed to outperform in the face of broader bond market losses.  Think of this as payback for all the days where Treasuries improved at faster pace than MBS were able to match.