US Bonds Try (And Fail) To Follow The EU Rally

The average day over the past few weeks/months has seen a high level of intraday volatility, ultimately resulting in weaker trading levels for bonds.  In that sense, today was very average. Domestic traders were lined up to sell after watching yields dragged lower overnight by weak economic dat in Europe. Sellers succeeded in pushing yields up to 4.291% before short-covering trades chased the EU rally into the noon hour.  “Chase” is a relative term considering the big underperformance(the last time British yields were this low, US 10s were around 3.75).  After that, bonds drifted uneventfully weaker to the highest yields in more than a decade.  Just another day in 2022.

Econ Data / Events

Markit Services PMI

46.6 vs 49.6 prev

Markit Manufacturing PMI

49.9 vs 52.0 prev

Market Movement Recap

09:02 AM Modestly stronger overnight with some 2-day volatility over the past few hours.  10yr down 2.5bps at 4.194 and MBS up just over an eighth of a point.

09:57 AM Weakness into and after the 9:30am NYSE open with buyers pushing back after the lackluster Markit PMI data.  MBS and 10yr yields both roughly unchanged. 

01:06 PM Plenty of range-bound volatility.  MBS were near highs, up just over an eight of a point moments ago–now down 3 ticks (.09).  10yr yields were down a few bps, trading just under 4.19 and are now back up to 4.217.

04:48 PM Drifting uneventfully weaker into the close with yields up 2.8bps at 4.247.  MBS are down 6 ticks (.19) and have been fairly flat for the past few hours.

Published On: October 24, 2022 / Categories: Mortgage News /