Bonds Faded in the Afternoon Despite Oil Price Recovery
1 Hour, 23 Min ago
MBS Recap
Bonds Faded in the Afternoon Despite Oil Price Recovery
MBS Recap Matthew Graham | 5:18 PM
Bonds Faded in the Afternoon Despite Oil Price Recovery
Oil prices and bond yields started the overnight session higher, but both moved to the lows of the day just after 9:30am. From then on, oil went broadly sideways while bonds sold off gradually. If oil had instead moved higher into the afternoon, we might not care about the bond market weakness. But as it stands, we have bond-specific defensiveness in the afternoon replacing the modicum of bond-specific bullishness we noted in the morning commentary. Not the end of the world, but not ideal.
Sideways to slightly stronger. MBS up 1 tick (.03) and 10yr down half a bp at 4.528
10:40 AM
10yr yields are up 2bps at 4.552 and MBS down 5 ticks (.16).
03:27 PM
MBS down an eighth and 10yr up 2.3bps at 4.555.
Lock / Float Considerations
6/8/26 - Another leg higher for rates and another confirmation that it makes sense to remain defensive after a strong sell-off in response to a big beat in the jobs report. Upward momentum in rates waned a bit, but we're not taking much solace in that considering oil prices would have justified stronger closing levels in the bond market. We'd wait for better evidence of support before returning to a more neutral lock/float stance.
