Bonds remain surprisingly willing to react to the most seemingly insignificant war-related headlines. Today it was the much-debated geographical location of Pakistan's lead negotiator, Asim Munir, that set the tone. Bonds rallied on early accounts that he was en route to Tehran and pulled back when other headlines suggested he never left Pakistan. Ultimately, yields trickled just barely into positive territory by the end of the holiday-shortened session. Monday is fully closed for Memorial Day and we're back to watching the news feed on Tuesday.
Modestly stronger overnight with some additional gains after early peace talk headlines. MBS up an eighth and 10yr down 2.2bps at 4.547
10:09 AM
MBS now up only 1 tick (.03) and down 7 ticks (.22) from the AM highs. 10yr up 0.4bps at 4.572 after briefly trading below 4.53.
12:48 PM
After being down almost an eighth, MBS are back to being up 1 tick (.03) and 10yr yields back to unchanged after being about 1bp higher.
Lock / Float Considerations
5/22/26 -Bonds remain transfixed by war-related headlines and surprisingly receptive regardless of the quality of the news. The clear takeaway is that there's room to rally when peace is official, but also room to sell if the peace process falters.
