Concocting a Narrative to Fit The Market Movement
Wed, May 29 2024, 4:02 PM
There are certain days and even weeks where the bond market could reasonably do whatever it wants without one outcome being more surprising than the other. This is one of those weeks. Yields began on the doorstep of the 4.50% technical level. If markets treated it as breakout selling cue, the result is today’s closing levels over 4.60%. But if the market opted to maintain the range, it would be just as reasonable to see yields trading under 4.40%. Either way, we’re left to examine the bottom shelf market movers and explain how those outcomes fit a higher/lower yield narrative. In this case, it’s higher, but the point is that nothing has really changed and nothing is really being decided in the bigger picture.
09:48 AM
Losing ground after opening flat. MBS down 5 ticks (.16) and 10yr up 2bps at 4.612
11:13 AM
Fairly flat at weaker levels. MBS down 5 ticks (.16) and 10yr up 3bps at 4.622
01:07 PM
More losses after 7yr auction. 10yr yields up 6+bps at 4.654 and MBS down the better part of a quarter point.
03:18 PM
Off the weakest levels and sideways in the PM. MBS down 5 ticks (.16) and 10yr up 4.1bps at 4.634
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