Bonds Turn Red Early, But Outright Losses Were Minimal

The week began with refreshing stability and modest gains for bonds, but that only lasted a few hours before sellers pounced.  Corporate debt issuance combined with a technical break of 1.30% in 10yr yields to spark a quick move higher mid-morning.  MBS followed with a sell-off that shaved a quarter point off intraday highs, and prompted widespread negative reprices.  That said, the outright level of additional weakness (vs Friday) was minimal in light of the issuance outlook.  Traders will have bigger decisions to make later this week--especially on Wednesday (CPI + 10yr auction).

Econ Data / Events
Market Movement Recap
09:37 AM

Bonds trickled to slightly stronger levels in the overnight session and have managed to hold on to them in the first hour of the domestic session.  Boring, robotic trend channel so far today with no obvious inspiration or correlation with data/events.  Only exception: just now at the 9:30am NYSE open, which brought slightly better buying.

11:01 AM

Quick surge in selling pressure starting at 10:42am ET--enough to break the technical ceiling at 1.30 and carry yields up to 1.32%.  MBS down a quarter point from the AM highs.  No obvious justification apart from corporate bond supply impacts.

01:22 PM

Bonds tried to find footing at 1.32% in 10yr yields, but have been slipping a bit.  MBS at new lows, down an eighth on the day and more than a quarter from AM highs.  Corporate bonds + technicals are main culprits (not the JOLTS data, as some news outlets suggest).

02:53 PM

Drifting sideways and not losing any additional ground since 1:35pm ET.  Similar levels to the last update.