Gradual Selling Leaves Bonds Only Slightly Stronger.
1 Hour, 46 Min ago
MBS Recap
Gradual Selling Leaves Bonds Only Slightly Stronger.
MBS Recap Matthew Graham | 4:14 PM
Gradual Selling Leaves Bonds Only Slightly Stronger.
With both sides signing the peace memo, the market was immediately willing to react in the overnight session, but that reaction fell short of what we might expect for an official peace deal. This is a bond market problem more than an Iran war problem. Case in point, oil prices stayed flat after their big overnight drop. Stocks added to strong overnight gains. Bonds were the odd man out. Part of the reason is that bonds did more than stocks to get in position for this eventuality last week. As of today, both the S&P and 10yr are close enough to the best recent levels to say the overall market reaction has been fairly even keeled. We'd also expect more bullishness among bond traders when the deal is officially official (possibly after Friday's scheduled meeting in Switzerland). Finally, bonds could be holding back a bit to see how Wednesday's Fed announcement goes.
Nice rally overnight on confirmation of U.S./Iran peace deal with scheduled signing. MBS up nearly a quarter point and 10yr down 3.3 bps at 4.452
12:35 PM
MBS still up 7 ticks (.22) and 10yr down 2.4bps at 4.461
03:21 PM
MBS up 5 ticks (.16) and 10yr down 2.2bps at 4.463
Lock / Float Considerations
6/15/26 - Despite the initial signing of the peace deal, some uncertainties remain between now and Friday's formal meeting. This has pros and cons. On the downside, it means there's a risk that the deal is called into question and that rates move higher. On the upside, it means there's probably more improvement in store when things become officially official. For now, lock/float risks remain broadly balanced. We'd feel more defensive if Friday's high yields are broken or if yields make a run at 4.42% and bounce hard.
