Monday's trading session ended up being as simple as it was unpleasant. Bonds lost ground somewhat sharply as war-related headlines kept adding up to additional escalation. Highlights include overnight reports of Iran hitting a U.S. warship with missiles, multiple reports of UAE air defenses being activated, and damage/fire at a UAE oil export terminal. While bonds had a few moments of independence, they were broadly driven by rising oil prices associated with the aforementioned headlines.
moderately weaker overnight. 10yr up 3.5bps at 4.41 and MBS down 7 ticks (.22).
11:31 AM
Weakest levels after headlines regarding Iran attacking UAE. MBS down 3/8ths and 10yr up 6bps at 4.435
02:23 PM
sideways just off weakest levels. MBS down half a point and 10yr up 7.1bps at 4.447
Lock / Float Considerations
5/4/26 - Despite Friday's hopeful technical set-up, yields were unable to close below our confirmation target of 4.37. Now today, they're up to multi-week highs and above the 4.42% technical level. Of course a sweeping peace agreement with Iran could change the tone at any moment, but until then, a defensive strategy makes the most sense.
