Big Scary Reversal in Bonds (Spoiler Alert: It Wasn't That Scary)

Just as bonds were settling into a nice new trend toward lower yields, today comes along with the biggest intraday reversal in weeks.  But even if the weakness was twice as big, bonds would still be in a great place and we still wouldn't be seeing a major cause for concern.  That will change some day, but it didn't change today.

Econ Data / Events

  • 11:30-11:50 AM (ET) - Fed 30yr UMBS Buying  

  • Core Annual Wholesale Inflation (PPI) 0.1 vs 0.4 f'cast, 0.3 prev

Market Movement Recap
08:16 AM

Stocks and bond yields both slumped overnight.  Once again, bonds continued to improve even as stocks bounced.  10yr yields down 3+ bps at .582 (range floor), and UMBS 2.0 opening up 3 ticks (.09) at 103-03 (103.09).

12:09 PM

MBS remaining surprisingly resilient despite weakness in Treasuries.  10yr yields up .6bps now while 2.0 UMBS are UP and eighth on the day.

01:59 PM

Treasuries remain under moderate pressure as stocks continue making gains.  MBS are still outperforming, but are now closer to 'unchanged' on the day.

03:44 PM

Selling continued to be resolute in Treasuries and MBS finally gave in.  10yr yields are up 2.4bps and 2.0 UMBS are down more than an eighth on the day.  Stocks are back at the highs of the week.