Bonds had a decent day with MBS up more than a quarter point and 10yr yields down 3bps to 4.54+. While that adds some emphasis to the rejection of a technical breakout above 4.59%, we can't really conclude that it happened for any bond-specific reasons. In fact, we're forced to conclude that bonds are on auto-pilot for the most part and that oil prices are the key input for now. As was the case in June, we know this correlation isn't permanent, but it's been highly reliable during this resurgence of U.S./Iran tensions.
Fairly flat overnight and just a hair stronger now. MBS up 2 ticks (.06) and 10yr down just under 1bp at 4.566
12:35 PM
Additional gains, still correlated with oil prices. MBS up 9 ticks (.28) and 10yr down 3bps at 4.543
03:35 PM
Off best levels, but still stronger. MBS up 11 ticks (.34) and 10yr down 3bps at 4.543
Lock / Float Considerations
7/9/26 - Tempting to view today's additional gains as additional evidence for 4.59% ceiling, but the performance was highly dependent on oil prices. We have yet to see a compelling bond-specific counterattack to push back against the past 1.5 weeks of selling. That said, risk-tolerant clients once again have some room to use 4.59% as a lock trigger.
