10yr yields are set to end the week at the highest levels since last July, but those were even higher highs earlier this morning. From roughly 9am-1130am ET, bonds recovered all of the day's losses in a move that was led by adjustments to Fed rate hike expectations. Yes, we can/should call it that now because there are no longer any rate cut expectations based on futures trading. Instead, there's indecision about holding steady vs a small chance of rate hikes. War headlines remain the dominant focus and weekends continue to offer a higher concentration of risk for financial markets.
Additional weakness overnight. MBS down 6 ticks (.19) and 10yr up 3.2bps at 4.452
11:39 AM
Bonds turning green. MBS up 2 ticks (.06) and 10yr down almost 1bp at 4.412
03:48 PM
Drifting back into weaker territory, very gradually. MBS down 1 tick (.03) and 10yr up 2bps at 4.44
Lock / Float Considerations
3/27/26 - Mixed blessings today as rates rose to higher highs, but not quite as high as they would have been after this morning's initial rate sheets. Still, the recovery is by no means a sign of a top being in for rates. A defensive strategy remains the only strategy until we see a definitive shift in momentum (something that will take more than a day or two of improvement).
