Earlier in the day, Treasuries looked to be selling off at a slower pace versus the past few trading sessions.  After sharp spikes in yields, this is the kind of pattern we tend to see before bonds find some support and undergo a friendly correction.  But just after the 9:30am NYSE open, Treasury yields hit more new long-term highs, thus re-setting our vigilant search for support.  To make matters worse, MBS underperformed (i.e. they had an even worse day than Treasuries) with both UMBS 1.5 and 2.0 coupons losing nearly 3/8ths of a point by the close.

Econ Data / Events

Market Movement Recap

08:34 AM

Treasuries were slightly stronger during the first part of the overnight session.  After a brief sell-off heading into domestic hours, yields just regained positive territory, down less than 1bp at 1.11%.  MBS are opening 1-2 ticks (.03-.06 weaker).  No econ data on tap (just 3yr Treasury auction and various Fed speakers).

01:12 PM

Bonds have weakened steadily since the more abrupt selling at the 9:30am NYSE open.  There are no specific market movers underlying the selling.  General pressure is coming from technicals/momentum, corporate bond issuance, and the Treasury auction cycle.

03:48 PM

The broader bond market remains sideways to slightly weaker at the highest levels since March.  MBS have been underperforming (still) and 2.0 coupons are now at the lowest prices since early August (1.5s weren’t trading then).