"Flat" is an Understatement

Recent trading activity lies in stark contrast to the drama seen earlier in 2020.  Even at the beginning of June, bonds still had an interesting (and scary, at first) story to tell as yields spiked in response to stronger econ data and coronavirus hopes.  Both of those factors remain in play, yet bonds are now back near their best post-covid levels and trading in one of the narrowest ranges ever.  What changed?

Econ Data / Events
Market Movement Recap
08:03 AM

Stocks were stronger overnight as EU leaders approved a much-debated pandemic recovery package.  Bonds weren't too bothered as central bank buying continues.  MBS and Treasuries are starting out nearly unchanged.

10:54 AM

 Bonds have drawn just a bit of strength from stock weakness with 10yr yields now lower on the day by roughly half a bp (effectively unchanged). 2.0 UMBS are up 2 ticks (0.06) trading about an eighth of a point under 103.  

01:30 PM

Bonds are pulling back a bit after the EU close (like yesterday).  Stocks are trying to bounce as well (also not helping).  10yr yields still down on the day, but just barely.  UMBS 2.0 are up 1 tick (0.03) now but that's nearly an eighth of a point off the highs.

03:46 PM

The pull-back proved to be as temporary as the stock market's ability to avoid additional weakness.  As stocks slid to new lows, bonds held near the day's best levels.