Another Move to Long Term Lows ‘Just Because’
Today began with more upward pressure on yields, apparently due to a higher-than-expected inflation report in the UK. That jived with much of the recent analysis which gives plenty of credit to UK market volatility for spilling over to the US. A closer look at this week’s US vs UK yields shows a breakdown in the recent correlation–one in which US yields are continuing higher while UK yields are recovering. We were left with explanations so unsatisfying that they may as well be filed under “just because.”
Econ Data / Events
1.439m vs 1.475m f’cast, 1.566m prev
1.564m vs 1.530m f’cast, 1.542m prev
Market Movement Recap
08:26 AM Sharply weaker overnight, mostly after higher inflation data in the UK. 10yr up almost 10bps to 4.10%. MBS down 3/4ths of a point.
10:20 AM Decent recovery. MBS still down 14 ticks (.44) on the day but up more than 3/8ths of a point from the lows. 10yr still up 7.3bps on the day, but down more than 4bps from the highs.
12:37 PM Mid-day gains mostly gone with 10s up 11bps at 4.115 and MBS down 5/8ths on the day.
01:05 PM weaker 20yr bond auction pushing yields to new highs.
04:05 PM Back near weakest levels of the day for MBS, now down 3/4ths of a point and up to new highs for Treasuries, up 12.3bps at 4.129