Bonds digested several big ticket economic reports as well as a host of war-related headlines that probably would have caused a much bigger reaction a few weeks ago. But the net effect was an almost perfectly flat day by the 3pm CME close. If anything, the data caused some weakness and we can say bonds would have rallied more noticeably otherwise. The weak response is no surprise considering all 3 reports were stronger than expected. This also serves as a reminder that Friday's jobs report is still a relevant market mover despite a general focus on the war and energy prices.
slightly stronger overnight with a bit of selling after ADP. MBS still up an eighth and 10yr down 1.3bps at 4.301
08:38 AM
Giving up gains after Retail Sales. MBS unchanged and 10yr up half a bp at 4.317
11:04 AM
Recovering some ground now. No particular reason. MBS up an eighth and 10yr down 1.2bps at 4.301
01:43 PM
MBS up about an eighth and 10yr roughly unchanged at 4.313
03:23 PM
MBS up only 2 ticks (.06) and 10yr up 1.6bps at 4.33
Lock / Float Considerations
4/1/26 - Surprisingly light volatility for the 1st day of the month, but notably, no follow-through from the past days of gains. The biggest risk takers may be taking some heart in the constant stream of "war over soon" headlines, but the average client is still waiting for the bond market to show us more love before abandoning a defensive strategy by default.
