MBS RECAP: Bonds Now Officially Trying to Break Out of The Range

Posted To: MBS Commentary

It was a volatile, but positive day for bond markets with 10yr yields closing well outside the recent range at 2.06. Fannie 3.5s gained 8 ticks to end at 104-09 and 3.0s were up 10 ticks at 101-09. Most of the 'back and forth' volatility occurred during the overnight session. Yields drifted slightly lower by the time European markets opened only to launch themselves quickly higher as stocks/oil/etc bounced back. In general, there were simply the same sorts of "risk-on/risk-off" tradeflows across multiple markets. For example, when "risk is on," stocks, commodities, and bond yields are rising. When "risk is off," bonds rally and stocks/commodities are falling. Away from all that wide-angle logic, there are no great explanations for each of the day's...(read more)

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