What’s Up With Today’s Massive Sell-Off In Bonds?

Bonds tanked hard today.  Losses were in place right from the outset and things only got worse as the day progressed.  The leading explanation focused on a more hopeful outlook for diplomacy in the coming days (and despite ongoing death and destruction).  Declines in oil prices bolster that case, but the stock sell-off makes a counterargument.  Today’s video discusses the validity of this “de-escalation” trade as well as other potential market movers.  Regardless of motivations, it was a nasty day with both MBS and Treasuries hitting their weakest levels since early 2019.

Econ Data / Events

Fed MBS Buying  10am, 11:30am, 1pm

Market Movement Recap

08:48 AM Sharply weaker overnight and no relief in early trading.  Lots of focus on hopeful peace talks.  10yr up 8.5bps at 2.082.  MBS down more than half a point.

10:43 AM Selling trend continues in linear fashion.  10yr now up 10.6bps at 2.103.  3.0 UMBS down 5/8ths of a point.  

01:52 PM Steady weakness continues in Treasuries with 10yr up 12.2bps at 2.121%.  MBS are down between 5/8ths and 3/4ths point depending on the coupon.  

02:41 PM Another hour, another leg down for bond prices.  MBS off nearly a point in the now defunct 3.0 coupons.  3.5s are down almost 3/4s.  10yr yield is up 14bps at 2.136%.  
Source: Mortgage News Daily