Bond Market Breakout is Here (The Bad One)

For days--and especially since last Friday--we've been increasingly worried that the 2-month bond rally was running out of steam and at risk of a reversal.  The jury was technically out until all of our overhead ceilings were taken out.  As of today, they are.  

Econ Data / Events
Market Movement Recap
08:23 AM

Bonds much weaker overnight as yields finally break technical support at the .57/58 barrier.  Quickly up to .62+.  MBS starting out an eighth lower.  Russian vaccine in the headlines, but it's a supporting actor at best.

10:42 AM

Treasury yields at new highs (.646%) and MBS near the lows of the day, down 6 ticks (0.19) at 103-15 (103.47).  Stocks are roughly were they were before last night's vaccine headlines (mildly stronger).

02:47 PM

Cue the capitulation selling spree for MBS.  They were willing to outperform until this afternoon, but are now getting caught up with Treasury weakness.  2.0 UMBS down almost half a point.  10yr yields up more than 7bps to .656%.  Reprices galore.

04:05 PM

Big volatility in both directions this afternoon, but stock weakness ultimately helping bonds claw back some of the day's losses.  MBS now down "only" 9 ticks (.28) on the day and 10yr yields are back down to .628%.  Good luck assigning blame.  The huddle video goes into greater detail on that.