Some summertime Mondays are slow and uneventful. Some see brisk movement. Today's was somewhere in between. There was modest pressure at the outset following headlines about Iran planning to escalate hostilities. The sharpest increase in oil prices coincided with Iran seizing a UAE tanker in the Strait of Hormuz. 10yr yields followed and hit the highs of the day shortly thereafter. Bottom line: fairly straightforward day, even if moderately unpleasant for fans of low rates.
MBS down 3 ticks (.09) and 10yr up 1.9bps at 4.712
Lock / Float Considerations
8/17/26 - Meaningful progress for the bond market remains elusive--a fact that's doubly true on any day with higher fuel prices in play. This dynamic will continue as long as the Iran war continues, thus making overnight floating a perpetually risky strategy.
