Hopeful Markets and Big Corporate Deal Pushes Yields Higher

Stocks and bond yields moved higher in unison today while oil prices fell–a pattern that generally and broadly conveys “risk-on” trading sentiment surrounding Ukraine.  Some would say this had to do with overnight headlines regarding openness to diplomatic solutions on both sides.  Others would say “yeah, but Russia bombed a children’s hospital a few hours later.”  Regardless of the “yeah buts,” markets took the de-escalation ball and ran with it.  Things got incrementally worse for Treasuries due to a big corporate bond deal that poached buy side demand throughout the day.

Econ Data / Events

Fed MBS Buying  10am, 11:30am, 1pm

Market Movement Recap

08:30 AM Bonds tanked again overnight, this time as a part of a risk-on move following comments from Russia saying their aim is not to overthrow Ukraine’s government.  10yr up 5.4bps at 1.892 and MBS starting out down 6 ticks (.19).

11:04 AM Additional weakness in the past 15 minutes, especially for MBS.  10yr yields keep grinding gradually higher, now up 8+bps at 1.922.  UMBS 3.0 down 10 ticks (.31), and more than an eighth below AM highs.

12:50 PM Recovering a bit ahead of the 10yr auction.  Yields now up only 6.4bps at 1.904.  MBS down just over an eighth. 

01:39 PM 10yr at highs of day after moderately weaker auction, now up 9.9bps at 1.939%.  MBS still not back to lows, but also weaker since auction, down 10 ticks (.31) at 100-07 (100.22).
Source: Mortgage News Daily