MBS Live Recap: Bonds Ignore Stocks to Hold Steady on The Week

10yr yields ended the week at almost exactly where they began.  With the exception of Tuesday, bonds closed within 1.5bps of each other on the other 4 days this week.  Tuesday was only 2bps higher and gave way to an overnight rally that restored the range anyway!

Long story short, for all the hullabaloo about Turkey/China/Etc. it was a really quiet week.  Part of the issue is that Turkish shockwaves had their fun last week, but even then, it's not as if bonds are making big moves in the bigger picture.

If bonds aren't moving, perhaps we can find something interesting to say about something that IS moving and that usually has an effect on bonds.  Granted, I'll be the first to point out that the stock market should never be seen as a bond market indicator, but if we want to keep track of when the two are moving together and when they stop, that's different, even if it's more of a curiosity than an argument for strength/weakness.

All that having been said, if you were determined to use today's moves in stocks to draw a conclusion about bonds, it would be bond-friendly.  Reason being, stocks rose again, with most of the gains hitting after reports of US/China trade talks set for next week.  Although bond yields did rise after that news, they didn't rise much.  The sense of "ground-holding" over the past 2 days is fairly clear in the chart.