Bonds improved overnight at the start of European trading and made additional gains in concert with lower oil prices during the domestic session. Notably, the gains met resistance at 4.42%--a resistance level that's been on our radar since the last bounce a few weeks ago. Technical levels certainly don't predict the future, but they can provide a framework for measuring the pace of change in trading levels. If bonds are weaker in the morning, it would act as confirmation that the initial response to the Iran peace deal has played out. In addition, there's potential volatility surrounding the Fed announcement, almost exclusively reserved for feeling out any visible shifts from new Fed Chair Kevin Warsh.
Stronger overnight as Europe trades the peace deal. MBS up 6 ticks (.19) and 10yr down 4bps at 4.438
11:55 AM
Best levels. MBS up 6 ticks (.19) and 10yr down 5bps at 4.428
03:03 PM
MBS up 10 ticks (.31) and 10yr down 5.3bps at 4.425
Lock / Float Considerations
6/16/26 - From a technical standpoint, there's some suggestion of caution after 10yr yields hit the 4.42% floor today and bounced incessantly before ultimately heading slightly higher in the afternoon. Anyone who'd been floating with a 4.57% lock trigger/ceiling would be inclined to adopt a more defensive stance until and unless 4.42% is definitively broken.
