It would be easy to check in on the bond market at some point on Thursday afternoon and conclude there'd been precipitous escalation in the Iran war or some other big new development putting pressure on bonds (10yr yields up almost 10bps to 4.42+ and MBS down more than 5/8ths). But today's selling was remarkably linear and steady. It began in the overnight session and ramped up at 10:30am ET after a brief correction this morning. If you need a single scapegoat, it's simply "renewed escalation" after yesterday's session raised some hopes for the opposite. Looking a bit deeper, we also suspect the entire market is positioning defensively for a weekend with serious volatility potential.
