Posted To: MBS Commentary

Caveat 1: bond yields hit the highest intraday levels in more than 4 years before the open. Caveat 2: bond yields hit the highest intraday levels in more than 4 years twice last week. Those two caveats aside, today wasn't too bad! Bonds ended up in roughly unchanged territory and managed to avoid taking cues from equities markets. Stocks moved higher after an initial sell-off in the opening hour. The release of Trump's budget pushed stocks slightly higher again about an hour and a half later. Bond markets noticeably abstained from reacting to the budget news despite being directly affected by any new issuance that arises from it. On one hand, traders are already positioned fairly defensively with respect to new Treasury issuance. On the other hand, bond traders don't assume that…(read more)