Uncharacteristically Quiet, But Still Slightly Weaker
Bonds started the overnight session stronger, but lost ground on Putin propaganda regarding progress in peace talks with Ukraine. Meanwhile, Russian artillery was moving into firing positions around Kyiv, but headline reading trade algorithms didn’t care. Bonds reversed course during the day after Ukraine’s Kuleba said there’d been zero progress in peace talks. All of the above took place inside the week’s narrowest range and in the lightest volume.
Econ Data / Events
Fed MBS Buying 10am, 11:30am, 1pm
Consumer Sentiment 59.7 vs 61.4 f’cast, 62.8 prev 1yr Inflation Expectation Change +0.5% 5yr Inflation Expectation Change 0.0%
Market Movement Recap
08:46 AM Bonds were flat until 6:23am when Putin comments pushed yields and stocks higher. 10s are up 2.5bps at 2.018 and MBS are down an eighth (looks bigger on charts due to roll)
02:04 PM Drifting to weakest levels of the day in PM hours. MBS underperforming due to curve flattening trades. 3.0 coupons down a quarter point. 10yr up 1.1bps at 2.002%.
03:23 PM At the 3pm CME close, only 30yr bonds were green on the day. The rest of the curve was noticeably flatter with 2yr yields the biggest loser, up 4.2bps on the day. MBS were nearly a quarter point lower with 3.0 coupons at 99-18 (99.56).