Friday ended up being the least interesting day of the week although it did manage to offer some hope that the post-Fed selling spree has found a limit. Bonds were just a bit weaker in the overnight session but opening levels were roughly in line with Thursday's weakest levels (so no real additional selling in daily terms). In addition, the opening levels served as support that offered several bounces throughout the day in Treasuries (4.14% in 10yr yields, e.g.). Some would consider such things to be early evidence of the market finding its footing after 2 days of selling. Ultimately though, bigger moves remain dependent on econ data. Next week is fairly light in that regard, but the plethora of Fed speeches could help balance the hawkish takeaway from this week's Powell press conference.
Modestly weaker overnight but erasing some losses since 9am. MBS down 2 ticks (.06) and 10yr up 1.5bps at 4.119.
12:25 PM
10yr yields are near today's highs at 4.139, up 3.5bps on the day. MBS down just over an eighth of a point.
03:09 PM
MBS down an eighth and 10yr up 2.8bps at 4.132
Lock / Float Considerations
Most clients are lock-biased until the post-Fed selling momentum meets clear resistance. The most risk-tolerant clients are taking heart in the bond market's attempts to find support over the past two sessions (stronger start on Thursday and holding the line without adding to modest overnight losses on Friday). This speaks to the possibility that further selling isn't necessarily a given without further justification.
