The day ended as it began: with bond yields and oil prices dropping in unison based on hopeful headlines surrounding the Iran war. Perhaps the market was in the mood for a rally because the headlines weren't particularly specific or compelling. Oil prices are closer to the middle of their range for the month of August whereas 10yr yields are closer to the low end of the range. This could suggest a bit of a willingness to rally on the part of the bond market, but sustaining the rally would require continued cooperation from oil as well as econ data.
MBS up a quarter point and 10yr down 3.9bps at 4.659
01:40 PM
MBS up 10 ticks (.31) and 10yr down 5.5bps at 4.642
03:49 PM
MBS up 3/8ths and 10yr down 6.5bps at 4.632
Lock / Float Considerations
8/25/26 - Today is the first day that we've seen a potential challenge to the prevailing trend since it began in late July. Risk takers typically like to see if there's any follow-through at times like this. Breaking below 4.62% would be a stronger signal. Also, none of the above changes the fact that each new day is basically a coin flip based on the war and fuel prices. Risk averse clients prefer to use opportunities like this to lock.
