Bonds began the day in modestly weaker territory, but not weak enough to take 10yr yields above the 4.42% technical level. That was a notable development even before considering subsequent movement. The 8:30am PCE inflation data made room for a friendly reversal with modest losses being replaced by modest improvement. Bonds ultimately weren't able to hang onto the stronger levels seen in the morning with gradual selling in the late AM hours and another little pop of weakness following headlines that Iran had attacked a cargo ship in The Strait (not a U.S. ship, or the reaction would likely have been bigger). Bottom line: today failed to place an exclamation point on yesterday's rally, but it still wasn't a question mark. The only caveat is that quarter-end volatility is still a risk between now and Tuesday.
Decent gains after PCE comes in on target. MBS up 6 ticks (.19) and 10yr down 1.2bps at 4.375
11:00 AM
MBS up an eighth and 10yr down just under 1bp at 4.379
01:41 PM
MBS still up an eighth but 10yr now down only 0.3bps at 4.384
Lock / Float Considerations
6/25/26 -Thursday was a mixed blessing in that it technically confirmed the break below the 4.42% technical level, but didn't exactly do it with gusto. Still, from a strictly technical perspective, it's the best showing we've seen in a while. The caveat continues to be the random nature of potential quarter-end volatility.
